Council authorizes redemption of 2017 general-obligation bonds to realize interest savings

The council approved Bill 39-80 (first reading) authorizing redemption of the outstanding General Obligation Bond Series 2017, using surplus cash in the debt-service fund to pay approximately $830,000 in principal outstanding. Todd Goff with Piper Sandler said city debt models, run after the county provided assessed valuation data, showed an opportunity to use roughly $800,000 of debt-service surplus to redeem the 2017 bonds and save "over a quarter million dollars of interest cost" through the bonds' final maturity in 2037. Goff said the action would allow the city to maintain its existing debt-service levy of 0.717 cents and still remain in a comfortable debt position based on the model assumptions. Council member Mills asked for confirmation that the funds would come from the debt-service fund and not the general fund; the financial advisor and city staff confirmed the debt-service fund would be used. City staff added that preliminary projections still allow flexibility on the levy; staff indicated in coming weeks they may propose a rollback amount and that the debt-service levy could be adjusted within capacity. The motion to approve the first reading was moved, seconded and carried unanimously, 8-0. Council members praised bond counsel and staff for identifying the savings.