On 11/24/2009, the Agency issued the “Redevelopment Agency of the City of Sparks, Nevada, Subordinate Lien Tax Increment Revenue Bonds (Redevelopment Area No. 2), Series 2009” (the “2009 Bonds”) in the amount of $7,230,000 to finance a portion of the Legends at Sparks Marina Project. The outstanding principal amount is currently $6,270,000, and the bonds carry interest rates ranging from 6.125% to 7.75%.

In the current economic environment, there is the possibility to refund outstanding debt at a lower rate of interest, thereby lowering the Agency debt service costs. If the agency board approves the issuance of the “Redevelopment Agency of the City of Sparks, Nevada, Subordinate Lien Tax Increment Revenue Refunding Bonds (Redevelopment Area No. 2), Series 2014” (the “2014 Bonds”) in the amount of $7,285,000, the Agency will be able to pay the costs of issuance (estimated to be $144,925.28) refinance the existing debt at a rate of 3.249%, and fund the bond reserve. Preliminary estimates indicate the average annual savings from this lower interest rate will be $100,526 for each of the remaining 14 years, the total savings will be $1,507,992, which represent a present value savings of $1,200,905.

Final numbers, which were not available at the publication date of this staff report, will be provided at the Agency meeting of July 14th and are not expected to vary greatly from these estimates.  By approving the attached Resolution No. 129, the agency board approves the execution of the 2014 Bonds Indenture of Trust, the Escrow Agreement, the Waiver & Consent Agreement, and the Deposit Account Control Agreement, all of which are attached. Also attached is the Preliminary Refunding Pro Forma, which provides detailed financial information.

Execution of the documents is expected to occur in mid August.

1. The Agency Board could approve the issuance the Redevelopment Agency of the City of Sparks, Nevada, Subordinate Lien Tax Increment Revenue Refunding Bonds (Redevelopment Area No. 2), Series 2014. If approved, the Agency will save an estimated $1,507,99

2. The Agency Board could choose not to approve the issuance of the Redevelopment Agency of the City of Sparks, Nevada, Subordinate Lien Tax Increment Revenue Refunding Bonds (Redevelopment Area No. 2), Series 2014. The City will continue holding the existing debt at the current interest rates ranging from 6.125% to 7.75%.

I move to approve Resolution No. 129, a resolution authorizing the issuance of the Redevelopment Agency of the City of Sparks, Nevada, Subordinate Lien Tax Increment Revenue Refunding Bonds (Redevelopment Area No. 2), Series 2014; and authorizing the execution and delivery of documents relating thereto.