DATE: September 6, 2019
TO: Board of Mayor and Aldermen
FROM: Eric Stuckey, City Administrator
Kristine Brock, Assistant City Administrator/CFO
SUBJECT:
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Consideration of Resolution 2019-87, A Resolution Authorizing The Issuance Of General Obligation Refunding Bonds Of The City Of Franklin, Tennessee In The Aggregate Principal Amount Of Not To Exceed $41,500,000, In Multiple Series; Making Provision For The Issuance, Sale And Payment Of Said Bonds, Establishing The Terms Thereof And The Disposition Of Proceeds Therefrom; And Providing For The Levy Of Taxes For The Payment Of Principal Of, Premium, If Any, And Interest On The Bonds (Finance 08/08/19 4-0, WS 9/10/19)
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Purpose
The purpose of this memorandum is to provide information to the Franklin Board of Mayor and Aldermen (BOMA) concerning a resolution to refinance two outstanding bonds that may be refinanced for debt service savings.
Background
In 2007, the City issued a $20 million variable rate bond through the Franklin Public Building Authority for the purposes of financing costs for the new Police building. In the same year, the City entered into an interest rate swap agreement for the duration of the bond issue, with termination in 2037. The bonds are held by PNC Bank with a loan tender date of December 11, 2019, which requires action of the Board of Mayor and Aldermen to either extend the loan agreement with PNC Bank or refinance. Principal payments are scheduled annually from 2025 to 2037.
Moreover, in 2010, the City issued a taxable Recovery Zone Economic Development Bond in the amount of $15,725,000 for the purposes of funding road improvements. Principal payments are scheduled annually from 2024 to 2030. These bonds are eligible for subsidy subject to annual funding by the federal government's budget and are eligible for early redemption without penalty on March 1, 2020.
In the State of Tennessee, local governments who wish to refinance debt must submit a Plan of Ref...
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