City finance advisers recommend public sale to refinance interim borrowing, seek modest savings on 2016 bonds

Financial advisers and city finance staff briefed the committee on plans to permanently finance interim borrowing and to pursue a refunding of a portion of the 2016 bond issue.

Advisers said the city has drawn roughly $57 million under an interim program begun in 2023, of which about $22 million is tax‑supported and approximately $35 million is utility‑related. The advisers recommended a competitive public sale (target date April 21) for permanent financing rather than bank-term fixed deals, saying public markets have yielded better long-term rates in previous rounds. They described a 'just in time' interim financing approach (typical term three years) to match borrowing to project cashflows and avoid long-term money sitting unused.

On refundings, advisers said current modeling shows potential net present value savings of about $466,000 (~3.22% NPV) on eligible maturities from the 2016 issue and recommended proceeding only if the market produces the expected savings (staff said they will not proceed if the 3% NPV threshold is not met). Staff reviewed issuance-cost estimates (fees for rating agencies, financial advisors, bond counsel) and said issuance-cost authority across funds would be requested that evening to permit the sale process to proceed.

Why it matters: permanent financing must be in place before interim notes mature this summer; refinancing and refunding decisions affect long‑term debt service and budget planning. Staff said debt-policy metrics (debt-to-assessed-value and debt service-to-expenditures) remain within policy guidelines with the proposed financing. Council asked for details about net present value and the budgetary effect; staff provided a detailed schedule of projected debt service impacts by fund.