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Committee endorses up to $220 million in GO refunding bonds to cut debt costs
Summary
The committee recommended the Board approve up to $220 million in general obligation refunding bonds; the controller’s office estimated approximately $25.2 million in cash‑flow savings over 12 years and net present value savings of about $23 million (roughly 11% of refunded principal).
The Budget & Finance Committee on March 17 recommended that the Board approve a plan to issue up to $220 million in general obligation refunding bonds in two series to refinance outstanding GO bond issues. Luke Brewer of the Controller’s Office said current market conditions point to roughly $25.2 million in cash‑flow savings over a 12‑year period and an estimated net present value savings of about $23 million, which he said equals roughly 11% of the principal to be refunded and exceeds the city’s 3% minimum NPV savings policy.
The plan would use two series, with estimated true interest cost of about 1.86% and a final maturity date of June 15, 2033. The Controller’s Office said the first series could price in April 2021 and the second might be forward‑priced for later delivery. The BLA recommended approval and the committee recorded a positive recommendation to the full Board.
