Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Public Finance topic
No spam. Unsubscribe anytime.
Council hears plan to refund $24 million in redevelopment bonds
Summary
Stifel told the Poplar Bluff City Council it proposes a roughly $24 million tax-increment refunding to refinance 2015 and 2017 redevelopment bonds and reduce high-interest subordinate debt, which could free up a trustee-held surplus of about $1.75 million for taxing entities.
Stifel representatives presented a proposal to the Poplar Bluff City Council to issue roughly $24 million in tax-increment refunding revenue bonds to refinance two prior series issued in 2015 and 2017, and to take out as much high-interest subordinate debt as market conditions allow.
The proposal, presented by Jim Mallehi and John Klaus of Stifel, said the outstanding 2015 A bonds had about $5,705,000 remaining and the 2017 bonds about $7,395,000. A developer-held subordinate series from 2015 was described in the presentation as roughly $17,639,168 and accruing interest at about 8 percent. Stifel estimated the refunding could reduce interest on much of that debt to about 4–4.5 percent and simplify administrative accounting by combining two TIF areas into a single redevelopment TIF area.
Why it matters: presenters said lowering the interest burden would both reduce annual debt service and increase the likelihood that TIF debt could be retired before the end of the district's life. Stifel also noted a trustee-held surplus of about $1,750,000 that would be distributable to the city, Butler County, the school district and the community college after refunding.
Council discussion focused on mechanics and eligible costs under the redevelopment agreement. Council member David asked whether the reimbursement stream was sales tax generated inside the TIF and what the developer had been reimbursed for; Stifel confirmed eligible costs are infrastructure—utilities, roads and land acquisition—but not vertical construction such as buildings. John (Stifel) said the plan would refund all senior 2015 and 2017 bonds and approximately $12 million of subordinate 2015 B bonds, cutting the 8 percent accrual on that portion.
Stifel asked whether the council wanted the team to proceed. Council members indicated consensus to move forward and asked for a return workshop; Stifel proposed an April 6 workshop with final action April 20 if the council elects to proceed. The council scheduled the matter for the April 6 voting session by motion.
Quotes: "We anticipate that the interest rate would be approximately cut in half, somewhere in the 4 to 4.5 range," said Jim Mallehi, describing projected market savings if conditions permit. "By refunding almost $12,000,000 of that subordinate 2015 B, the likelihood of paying off all of the TIF debt before the end of the life of the TIF increases significantly," John Klaus said.
Next steps: Stifel will return with ordinance language and financing documents for council review, with the council having asked staff to set the refunding for the April 6 voting session and to consider final passage on April 20.
