R-1962-07 - Laserfiche WebLink

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, ". ~, I. '., .~ . ./'~ e. /~. e: ' t", ..- ,;:.... trJ,;~ :-" Ir '{ l; ~. ~_.l , ... e . Honorable r1a.yor and Members of the City Council La Porte, Texas Gentlemen: In connection with the presently outstanding $338,000 of Water- works and Seuer System Revenue Bonds I recommend that these bonds be re- funded for the rollowing reasons and in the follo~ing manner: 1) The presently outstanding bonds prevent the issuance of any additional bonds payable out of the revenues of the Water and Sewer System. This restriction cannot be removed without refunding all of the outstand- ing bonds. 2) The interest rates on the outstanding bonds are extremely favorable in that these bonds were sold in about 1950, at which time in- terest rates were at a lower point than they have ever been since that time. However, at the present time I can either exchange refunding bonds for the presently outstanding bonds or purchase proposed new refunding bonds at a price of par and accrued interest at interest rates shown on the attach- ed schedule. If this refunding is delayed until March, 1963, we may find that we are unable to refund because state statutes will not permit an increase in interest rates unless there be a savings in total interest cost. The test could be extremely difficult to meet if interest rates in general should be higher next March than they are at this time. I believe we should take advantage of the present market. 3) I 'Will make a sincere effort to effect an exchange of the new refunding bonds for the presently outstanding bonds offering the present holders, as inducement, a cash bonus of not more than an amount equal to interest to March 15, 1963. 4) The City Council agrees to make available, out of monies presently held in the Revenue Bond Reserve Fund, $11,483 for this purpose. This is interest from March 15, 1962 to and including 11arch 15, 1963.