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Council authorizes prepayment of Tallgrass Liquor lease revenue bonds to save interest costs
Summary
Council authorized early payoff of the remaining Tallgrass Liquor lease revenue bonds using reserve cash from Tallgrass operations; staff said paying by Feb. 1 would save an estimated $74,000 in interest on about $1.02 million remaining principal.
The council authorized staff to prepay the outstanding lease revenue bonds issued in 2015 for the Tallgrass Liquor municipal store.
EJ Moberg explained the Economic Development Authority issued lease revenue bonds in February 2015 tied to construction and equipment costs for the municipal liquor store at the Tallgrass location. Moberg said interest-rate conditions have changed since staff last considered payoff and that the city could save interest costs by redeeming the outstanding principal. He reported roughly $1.02 million of principal remained and estimated the city would save about $74,000 in interest if the bonds are prepaid on or by Feb. 1. Council moved to approve early payment and to authorize notice to the EDA and the bank; the motion passed on a voice vote.
Council members noted the early payoff is possible because of Tallgrass Liquor’s profitability and management in recent years. Staff will notify the EDA and bank and carry out the prepayment as authorized.
