City Council of Flagstaff authorizes $30M general obligation bond issuance for infrastructure

The City of Flagstaff City Council convened on March 5, 2024, to discuss significant financial matters, primarily focusing on the issuance of general obligation bonds. The meeting featured key financial advisors, including Mark Reeder from Stifel Nicholas and Paul Gales from Greenberg Traurig, who provided insights into the bond issuance process.

The council is seeking authorization to issue new general obligation debt related to voter-approved measures from the November 2022 ballot. This includes over $57 million earmarked for critical infrastructure projects such as wildfire suppression, stormwater flood mitigation, and wastewater improvements. The council plans to issue $30 million of this amount, strategically timing the issuance to align with cash flow needs.

Additionally, the council discussed a $20 million bond measure aimed at enhancing rental and homeownership opportunities for Flagstaff residents. The initial issuance will be $10 million, structured as taxable debt due to its business-related applications.

Another key point of discussion was the potential refinancing of existing debt. Financial analysis indicates that refinancing could yield approximately $270,000 in savings for the secondary property tax fund, contingent on favorable market conditions.

The council emphasized its commitment to maintaining a secondary property tax rate of 0.8, as promised during the bond campaign. The meeting concluded with a motion to read the ordinance for the bond issuance, which was approved unanimously.

Overall, the council's actions reflect a proactive approach to managing the city's finances while addressing essential infrastructure and housing needs. The next steps will involve monitoring interest rates to determine the timing of the bond issuances and refinancing opportunities.