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<br />Purchase of Debt Service Surety Bond <br />For Police Revenue Bonds Series 1994A <br />December 20, 2004 <br /> <br />The terms of the issuance required that bond proceeds in the amount of <br />$9,227,812 be retained by the Trustee bank and held in a debt service <br />reserve fund. The Authority is now able to replace one half of the cash <br />in this debt service reserve fund with a surety bond. The proposed <br />actions will secure the purchase of this surety bond from MBIA Insurance <br />Corporation, resulting in a release of $4,613,906 of the existing amount <br />held by the Trustee. This proposed surety bond will be issued by MBIA <br />Insurance Corporation at a cost of $219,000. <br /> <br />Additionally, staff recommends that Northcross, Hill, & Ach be retained as <br />financial advisor and Orrick Herrington & Sutcliffe LLP be retained as <br />bond counsel. These firms served on the financing team for the original <br />issue in 1994 and for the refinancing issue in 2004, as well as for other <br />City, Authority and Community Redevelopment Agency financings. Financial <br />advisor fees will not exceed $20,000 and bond counsel fees will not exceed <br />$5,000. <br /> <br />FISCAL IMPACT <br /> <br />After deducting the surety bond and closing <br />result in $4,369,906 of revenue to the City. <br />been anticipated in the revenue assumptions <br />budget. <br /> <br />costs, this transaction will <br />A portion of these funds had <br />for the current fiscal year <br /> <br /> <br />0 a <br />Executive irector <br />Finance & Management Services Agency <br /> <br />3-2 <br />