ATTACHMENT 1
GOOD FAITH ESTIMATE
The following information was obtained from KNN Public Finance, LLC, the municipal advisor (“Municipal Advisor”) with respect to the Bonds described in the Resolution, and is provided in compliance with Government Code Section 5852.1:
1. True Interest Cost of the Bonds. Assuming an aggregate principal amount of $29,585,000 of the Bonds are sold (which net of $314,717 original issue discount would generate $29,270,286 in proceeds) and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 5.35%.
2. Finance Charge of the Bonds. Assuming an aggregate principal amount of $29,585,000 of the Bonds are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the finance charge of the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $566,265.
3. Amount of Proceeds to be Received. Assuming an aggregate principal amount of $29,585,000 of the Bonds are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds less the finance charge of the Bonds described in paragraph 2 above and the reserves and capitalized interest paid or funded with proceeds of the Bonds, is $27,423,017.
4. Total Payment Amount. Assuming an aggregate principal amount of $29,585,000 of the Bonds are sold and based on market interest rates prevailing at the time of preparation of this information, a good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds plus the finance charge of the Bonds described in paragraph 2 above not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $65,189,563.
Attention is directed to the fact that the foregoing information constitutes good faith estimates only. The actual interest cost, finance charges, amount of proceeds and total payment amount may vary from the estimates above due to variations from these estimates in the timing of the sale of the Bonds, the amount of Bonds sold, the amortization of the Bonds sold and market interest rates at the time of the sale. The actual interest rates at which the Bonds will be sold will depend on the bond market at the time of the sale. The actual amortization of the Bonds will also depend, in part, on market interest rates at the time of sale. Market interest rates are affected by economic and other factors beyond the City’s control.