TO: Honorable Mayor & Members of the North Port Commission
FROM: Peter D. Lear, CPA, CGMA, City Manager
TITLE: Resolution No. 2020-R-16 Accepting a Proposal of Truist Bank to Provide the City with a Loan in Order to Refund a Portion of the City's Outstanding Transportation Improvement Assessment Bonds, Series 2013.
Recommended Action
Approve Resolution No. 2020-R-16 accepting a proposal of Truist Bank to provide the City with a loan in order to refund a portion of the City's outstanding Transportation Improvement Assessment Bonds, Series 2013.
Background Information
As financial advisor for the City of North Port, Florida (the City), PFM Financial Advisors LLC., (PFM) is assisting the City in refunding the outstanding Transportation Improvement Assessment Bonds, Series 2013. A bank loan proposal (2020 Note) is being recommended by City staff for City Commission approval. The 2020 Note will be issued to advance refund the callable portion of the City's outstanding Transportation Improvement Assessment Bonds, Series 2013 for debt service savings.
Under current tax law, tax-exempt advance refundings are no longer permitted. However, interest rates have declined to historic low levels, which provides the City with an opportunity to undertake an advance refunding of the 2013 Bonds via the issuance of a taxable note. The taxable interest rate on the 2020 Note may be converted to its tax-exempt equivalent within 90 days of the optional call date of the 2013 Bonds, which is July 1, 2023. Based on the desire to proceed in an expedited manner, reduced costs of issuance, and recent aggressive bids received from banks for comparable transactions, PFM recommended the City pursue a privately placed direct bank loan, which was expected to be an efficient and cost-effective method of financing.
At the City's direction, PFM issued a request for proposals (RFP) on February 27, 2020 to a list of local, regional and national financial institutions to identify a potential l...
Click here for full text