In November 2000, the City of North Miami Beach joined the Florida League of Cities in participating in a municipal tax-exempt bond issue.  The Series 2000 Bond was issued to the City in the amount of $17,305,000 with a useful life of thirty (30) years and secured by ad valorem taxation after a successful bond referendum. This series of general obligation bonds was issued for various capital improvements throughout thirteen (13) neighborhoods within the City. 

In June 2011, the City refunded the Series 2000 Bond and issued a JP Morgan Chase Promissory Note, Series 2011, in the amount of $14,835,000. This new Promissory Note resulted in a savings of $1,600,000, which is equivalent to 11% over the remaining life of the loan.

Currently, the City is proposing to refund the above-mentioned Promissory Note with JP Morgan Chase, Series 2011 for a lower interest rate, as the Note has become callable without a penalty for prepayment. It is necessary and in the best interest of the City to refund the Note in order to achieve debt service savings. 

The City is proposing to issue a General Obligation Refunding Note.  The proposed issuance of a General Obligation Refunding Note, Series 2022, in the principal amount not to exceed $9,500,000, will render a net present value savings of approximately $1,379,165, or 15.32% as a percentage of the refunded notes.  Additionally, The Note bears interest at a fixed rate no greater than 1.52%, will be repaid over a term not to exceed the maturity of the original Promissory Note (November 1, 2030), and may be repaid without penalty.

It is staff’s recommendation that the City Commission authorize the Mayor to execute the loan agreement and other related documents as required, with TD Bank to refinance the Promissory Note, Series 2011.

Executing this agreement to obtain a bank loan to refinance the 2011 series will result in a savings of approximately $1,379,165 or 15.32% over the remaining life of the loan.