Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Authorizing The City Manager Or Designee To Seek Loan Proposals During Fiscal Year 2022 To Borrow Funds In A Principal Amount Not To Exceed $10,000,000.00 To Pay The Remaining Balance Of The Amount Stipulated In The Settlement Agreement Between The City And The City Of Hollywood Employees Retirement Fund And To Finance The Acquisition Of Municipal Vehicles.
Strategic Plan Focus
Financial Management & Administration
Body
Staff Recommends: Approval of the attached Resolution.
Explanation:
The City is in a Settlement Agreement with the City of Hollywood Employees' Retirement Fund. There is a remaining balance of $8,019,031.48 to be paid per the stipulations of the Settlement Agreement plus accrued interest. The interest rate is the assumed rate of return of the Retirement Fund, which is currently 7.3%. The City can obtain funds from a bank loan at a considerably lower interest rate, pay off the outstanding balance, and save a projected amount of approximately $500,000.00 over the three years remaining in the term of the payment schedule. The Resolution authorizes the City to seek a loan in an amount not to exceed $8,500,000.00 for this purpose, including the outstanding principal, accrued interest and closing costs.
This Resolution also authorizes the City to seek a loan for the financing of the acquisition of municipal vehicles to replace vehicles at the end of their useful life in an amount not to exceed $1,500,000.00.
Fiscal Impact:
This Resolution authorizes the City to solicit loan proposals. The fiscal impact will be determined more specifically once the financing is finalized and closed. Preliminary estimates are that the annual debt service will be in an amount of approximately $2.9 million on an annualized basis for the three-year period for the loan to pay the balance of the Settlement Agreement plus accrued interest and closing costs. Using the funds obtained...
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