Nixa reports sale of $14.63 million special-obligation bonds for police building; Moody's rates bonds AA3

City officials heard results of a municipal bond sale for a new police building during the Jan. 28 Nixa City Council meeting.

Tom Calico of Baker Tilly Municipal Advisors reported the sale of $14,630,000 of 20-year special-obligation bonds that will finance the police building. He said the final par amount was reduced from the originally estimated $15,300,000 because the successful bid included a premium, leaving the city with the same budgeted proceeds but a different combination of principal and premium.

Calico said the sale drew six bids representing 37 banks; the winning underwriter was Robert W. Baird with a true interest cost of 3.96 percent. "The bids were extremely competitive," he said, noting the spread between the winning and the cover bid was only 0.05 percentage point.

Calico added that Moody's Investors Service assigned the bonds an AA3 rating and affirmed the city's AA2 issuer rating. He described the AA3 bond rating as typical for special-obligation debt that is generally rated one notch below issuer-level ratings and attributed the favorable outcome to Nixa's strong reserves and low outstanding debt.

Calico said the bonds are backed by the city's annual appropriation pledge and that the city intends to pay debt service from the public safety sales tax. He noted the mayor had been authorized under the bond ordinance to sign the purchase agreement on the day of sale because the award met the parameters established in the ordinance.

Calico thanked city finance staff and bond counsel Gilmore & Bell for their work on the transaction. Council took no formal vote on the report; the presentation was informational.