Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
County finance adviser outlines options for excess bond proceeds, recommends defeasance to reduce outstanding debt
Summary
A Colliers adviser told the Clay County Board of Commissioners that excess project funds could be placed in an escrow to defease part of the 2017 bonds, lowering the county's outstanding debt and producing interest savings; federal rules limit how bond-proceeds interest may be used.
Tom Grama, of Colliers, advised the Clay County Board of Commissioners on options for handling unspent proceeds from a prior bond issue, saying the county could place the surplus in an escrow to defease a portion of the outstanding bonds and thereby reduce the debt shown on its books.
Grama said technical defeasance involves putting funds into an escrow account whose earnings pay debt service on the defeased bonds until the bonds are callable, and that the transaction "reduces the amount of debt outstanding" without immediately allowing the county to spend the cash elsewhere. He estimated that, on a hypothetical $7,000,000 of surplus, a defeasance could remove about $6,565,000 from the outstanding balance and generate net present-value…
Already have an account? Log in
Subscribe to keep reading
Unlock the rest of this article — and every article on Citizen Portal.
- Unlimited articles
- AI-powered breakdowns of topics, speakers, decisions, and budgets
- Instant alerts when your location has a new meeting
- Follow topics and more locations
- 1,000 AI Insights / month, plus AI Chat
