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Council authorizes refunding that officials say will save about $1.14 million
Summary
Council approved resolution 26-03 to refund outstanding general obligation debt with Atlantic Union Bank at a fixed 3.74% rate; staff and financial advisor Davenport estimated present-value savings of roughly $1.14 million and said the loan carries flexible prepayment provisions.
The Williamsburg City Council approved resolution 26-03 on March 12 to refund outstanding general obligation debt for the city’s police station and public-works facilities after staff and financial advisors said bank proposals produced substantial savings.
Tyler Smith of Davenport summarized responses to a request for proposals and highlighted Atlantic Union Bank’s bid, which offered a 3.74% fixed rate through maturity and prepayment at par at any time. "Atlantic Union's proposal has an interest rate fixed through maturity at 3.74%," Smith said, and the firm reported estimated net present-value savings of about $1,146,623.
City financial advisers said the proposal reduces annual debt service compared with current planning estimates and generates more than the industry benchmark for worthwhile refundings; Davenport characterized the present-value savings at 7.52%, well above the customary 3% threshold.
Council approved authorizing the issuance of refunding bonds in an aggregate principal amount not to exceed $11 million and directed the city manager and finance director to execute loan documents subject to required closing conditions and final credit approval by the bank.
Officials said no new money is being issued and the action simply replaces existing debt with lower-cost debt; council recorded no negative votes on the motion.
