Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance Bonds topic
No spam. Unsubscribe anytime.
Athens council approves bond refunding to refinance pool debt, citing interest-rate savings
Summary
The Athens City Council unanimously approved an ordinance to issue up to $4,905,000 in refunding bonds to refinance existing debt on the city’s swimming pool, a move city leaders say will lower interest costs and stabilize annual debt service.
Athens City Council on Oct. 6 unanimously adopted an emergency ordinance authorizing issuance of up to $4,905,000 in bonds to currently refund all or a portion of outstanding debt issued to build the city’s swimming pool facility.
Council members and city officials said the refinancing would not create new debt but would replace higher-rate bonds with lower-rate refunding bonds to produce interest savings and stabilize annual payments. "This is about saving some money," Acting President Micah McCary said during a pre-meeting finance committee discussion. "It simply replaces existing debt with a lower rate."
Mayor Patterson said the timing is right because interest rates have dropped since the original bonds were issued. He credited City Auditor Kathy Hecht and the city's bond counsel and financial advisors for tracking the market and preparing documents needed to proceed. "This is the right thing to do to go out and continue to find ways in which we can save the city money," Patterson said.
The auditor noted the city is at the 10-year mark that typically allows refinancing and recalled a prior refunding that saved the city roughly $350,000; she said any savings now would be worthwhile. City staff reported the current outstanding debt is roughly $4,900,000, with annual debt-service payments around $550,000. A member of the public asked whether the city could increase annual payments to retire the debt earlier; Auditor Hecht said municipal refundings typically follow an amortization schedule and that prepayment options are generally limited.
Council moved to suspend rules and adopt the ordinance on the same night because bond counsel and financial advisors recommended acting promptly to lock in current market advantages. The ordinance passed unanimously.
What happens next: City staff and bond counsel will complete final refunding paperwork and close the transaction on the schedule set by the bond documents. The city said the refinancing process would not increase the principal outstanding and is intended to lower the city's interest expense going forward.
