Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Finance topic
No spam. Unsubscribe anytime.
Holladay LBA reviews parameters for up to $11.5 million lease revenue bonds to fund parks and City Hall upgrades
Summary
Authority staff and counsel reviewed parameters for issuing up to $11.5 million in lease-revenue bonds to finance a parks and recreation facility, City Hall seismic upgrades and other facility improvements; counsel recommended a par amount of $11.5M, an interest-rate cap of 6.5%, maximum maturity of 25 years, and delegation of final pricing to a designated officer. A public hearing is scheduled for Nov. 6; no bond vote is recorded in the transcript.
The Local Building Authority of the City of Holladay reviewed proposed parameters Sept. 18 for issuing lease-revenue bonds of up to $11,500,000 to fund a series of capital projects, including a parks and recreation facility, renovation and seismic upgrades to City Hall, and other city facility improvements.
Counsel explained the board should set a par amount above the estimated construction cost to cover a debt-service reserve, issuance costs and other contingencies. Counsel recommended setting the par amount at $11.5 million with an interest-rate cap “not to exceed 6 and a half percent,” a maximum maturity of 25 years, and a maximum discount from par of 3 percent. Counsel said the reserve fund is interest-bearing but investment options are constrained by the State Money Management Act and described potential negative arbitrage and federal rules that limit excess earnings.
Board members and counsel discussed likely uses of proceeds, expected construction funding of roughly $10,000,000 (with counsel noting an anticipated $10.2–$10.3 million draw), an estimated reserve fund on the order of about $800,000, and issuance costs that counsel said could run 2–3 percent of par on a smaller municipal issue. Counsel described market dynamics, the possibility of negotiating earlier call features, and the planned timing: the bonds are expected to be priced in early November and a public hearing is scheduled for Nov. 6.
A trustee voiced a preference to “maximize the par” if rates fall while keeping the board’s annual debt payment in the six-figure range to avoid moving into a seven-figure payment. Counsel said staff and a designated officer (chair or vice chair) could give final approval on pricing so long as the sale stayed within the board-approved parameters; counsel asked staff to provide any direction a few days before pricing or, technically, by the day of pricing.
No final bond authorization vote was recorded in the provided transcript; the authority will hold a public hearing Nov. 6 and proceed toward pricing in early November.
Next steps: the board will hold the public hearing on Nov. 6 and staff and counsel will return with final pricing for approval or delegated sign-off within the adopted parameter resolution.
