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City sells $31.63 million in bonds; advisor says double‑A rating and strong policies lowered borrowing cost
Summary
Finance director and advisor told council the city sold bonds within council parameters: $31.63 million par, true interest cost 4.55%, term to Sept. 1, 2055; no bond insurance was needed, saving upfront costs, and average annual debt service is roughly $2.025 million.
City financial staff briefed council on a just-completed municipal bond sale to finance public-works facilities, Zephyr Park renovations and Alice Hall improvements.
Ted Beason, finance director, introduced Jeff Larson of Larson Consulting Services, who said the council-authorized sale was placed in the marketplace under the parameters set by a Dec. 4 resolution. Larson said the issue's par amount was $31,630,000, the true interest cost (TIC) was about 4.55% (below the 6% cap council set), and the final maturity is 09/01/2055. Year 1 debt service (a partial year) was reported as $1,420,232; the average annual debt service thereafter is roughly $2,025,000.
Larson credited the city's financial policies and a double‑A rating for improving market reception and said the city did not purchase bond insurance, which saved an estimated $155,000 in upfront costs. He also noted that the city contributed roughly $17.65 million toward the larger $49 million package of projects, reducing the financed amount.
Council members asked clarifying questions about par-amount line items in reports and the optional redemption (call) provision; Larson explained typical no‑call periods and the city's ability to refund bonds after about nine years under federal tax rules. No council action was required on the presentation; staff will incorporate the debt-service schedule into upcoming budgets.
