Legislation Details

File #: 10-0134    Version: 1 Name:
Type: Ordinance Status: Passed
File created: 7/21/2010 In control: City Council
On agenda: 8/23/2010 Final action: 8/23/2010
Title: An Ordinance authorizing the execution and delivery by the City of Rock Hill, South Carolina of an amendment to a Standby Bond Purchase Agreement in connection with the City’s $10,000,000 Combined Utility System Revenue Bonds. Series 2000B (The “Bonds”); authorizing the appointment of a successor remarketing agent in connection with the bonds; and other matters related thereto.

Title

An Ordinance authorizing the execution and delivery by the City of Rock Hill, South Carolina of an amendment to a Standby Bond Purchase Agreement in connection with the City’s $10,000,000 Combined Utility System Revenue Bonds. Series 2000B (The “Bonds”); authorizing the appointment of a successor remarketing agent in connection with the bonds; and other matters related thereto.

Body

The City currently has two series of bonds outstanding that are classified as variable rate bonds.  Each bond is currently valued at $10 Million.  These variable rate bonds have historically offered a low interest cost, particularly over the last few years.  For example, in 2009-10 the City had an average annual interest cost of .29%.  In order to have a variable rate bond the City must also enter into a standby bond purchase agreement with a bank.  Under this agreement, the bank would agree to hold the bonds in the event that the bonds could not be placed during the weekly remarketing.  Previously, these agreements were put in place for a period of 5 years.  Recently, the banks have shortened the term on these agreements to no more than 3 years.  This ordinance and agreement establishes the term at 3 years.  An ordinance is required to shorten the term since the insurer of the bonds originally agreed to only a longer term agreement.  Staff recommends approval of the ordinance.