AG 2004 08 16 - Laserfiche WebLink

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July 31, 2004 To: Board of County Commissioners From: Pamela S. Dubois, Deputy County Manager Subject: Escrow Refunding I have been approached by Springsted concerning the potential savings in which Cabarms County could recover by refunding the investments in the escrow account of the 2004 GO Refunding. The Escrow restructuring program is designed to help issuers recapture existing negative arbitrage through the liquidation of existing State and Local government series (SLGS) securities and purchase new, higher yielding (cheaper) replacement investments. I have spoken with our Current Financial Advisor, Joe Niggel, UBS PaineWebber, concerning this concept. His recommendation, should the County decide to proceed with this refunding is to discuss and work with a firm IMAGE (Investment Management Advisory Group, Inc) due to complexity of the program and legal issues surrounding this concept. I have also spoken with Harry Weatherly from Mecklenburg County recently concerning this concept. Mecklenburg has proceeded with this process and has had success in recovering funds from their escrow accounts. The potential recover in the best case situation is approximately 1 million dollars. There will be legal fees and financial cost associated with this/these transactions. It may take more than one transaction to recover the funds. The market will place a significant role in the amount of funds recovered. With approval from the Board of Commissioners and with the assistance of the County Attorney, I would like to proceed with a company to try to recover as much of the negative escrow funds as available. All fees will be deducted out of the savings which are collected from the re.funding. I have attached a presentation of Escrow Restructuring Strategy which will provide a detailed review of the concept of Escrow Restructuring. I am available to answer any questions.