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November 28,2001 <br /> PUBLIC HEARING—COUNCIL BILL NO.01-11-50 <br /> President Simpson opened a public hearing regrading a proposed ordinance <br /> approving the issuance of$13 million in variable rate demand limited general <br /> obligation bonds for capital purposes. <br /> Debra Bryant,Finance Director,stated that the ordinance is for the issuance of <br /> $13,000,000 in variable rate demand bonds. The proceeds are to be used for <br /> capital purposes.fle primary purpose has been identified as real estate purchase, <br /> however,should the City Council decide at some point those proceeds could be <br /> used for other capital projects The interest rate on the bonds is variable and will <br /> be repriced weekly based on the bond market association municipal SWAP index. <br /> That rate this week is 2.125%.The tam of the bond is 20 years.The debt service <br /> will be paid out of COP It ]lo repayment schedule calls far interest only <br /> Payments over 7 years at which time principal payments will be made beginning <br /> in 2009.The reason for structuring it this way ares that CIP II has current debt <br /> service is which will ramp down considerably in 2009 allowing that <br /> revenue stream to be put toward this debt The muting Clis 11 debt includes Fire <br /> Station N0.7 and the Animal Shelter and a 1995 GO refnding which includes the <br /> Wall Street Building and Fire Station Nos.2 and 0. <br /> Councihn®bar Warnock voiced concerns about making interest payments only <br /> the first seven years,not having enough cash t0 pay for the land acquisitions and <br /> the fund balance in COP 5L <br /> limy Braaten,Banc of America Securities,was available to answer queseons.lie <br /> answered Mat by paying only interest the first seven years it would increase dm <br /> cost <br /> Debra Bryant stated that giver Me cmreot interest rate of 2.125%and average <br /> portfolio yield of0.65%is why this transaction makes so much sense. <br /> A discussion ensued regarding land cons. <br /> Couneilnrember Overstreet questioned how the balance could be supplemented if <br /> the need arose. <br /> Mayor Hansen stressed the strong financial position of the City of Everett <br /> 523 <br />