R-1999-26 - Laserfiche WebLink

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. e La Porte Area Water Authority Interoffice Memorandum To: Robert T. Herrera, General Manager LPAWA Board of Directors Steve Gillett, Director of Public Works From: eft Litchfield, Director of Finance Date: Subject: Refunding Issues At the Authority meeting of August 12th, the Authority will be asked to approve the Official Notice of Sale and Official Statement for the "$8,080,000 La Porte Area Water Authority Contract Refunding Bonds, Series 1999". This is a formality that has been too long in coming. This will start the final ball rolling in the refunding that we have been wanting to do for several years. We are able to do it at this time because the underlying bonds were finally refunded and a window of opportunity was created whereby the Authority could refund its bonds. As a reminder, the Authority's call date on its outstanding bonds is December 1. This means that we can call or redeem the outstanding bonds on December 1, 1999. A Draft Copy of the Official Notice of Sale and Official Statement is attached to this letter, beginning on hand numbered page 11. The Official Notice of Sale and Official Statement also has to be approved by the City of La Porte and it is being presented to them at their August 9th meeting. Also attached to this letter are several financial reports that show the projected impact of the refunding and how it relates to our Capacity Purchase. First is a four page report, beginning on page 3, that is a Projected Analysis of Refunding and Savings Report that was prepared by the Authority's Financial Advisors, Moroney, Beissner & Co. In reviewing it, it shows the impact of the refunding if the bonds can be refunded at the projected interest rates. Page 4 shows a projected savings report. It shows the potential exists for the Authority to realize a budget dollar savings of $1,592,432 and a present value savings of $1,243,654 if the bonds can be refunded at the estimated interest rates. Two important comments about the refunding report are that we are changing our Principal Payment Date to March, instead of December. March is a preferred date for financial planning matters. This creates a situation where we are actually paying more in debt service the first year and then drastically reducing the debt service in the following years. Second, we are moving as much of the savings "up front" as we can so we can use the funds to pay for the additional capacity purchase.