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Council authorizes up to $3.6 million in taxable bonds to reimburse general fund for property buys
Summary
The council authorized the finance director to issue taxable limited-tax general obligation bonds up to $3,600,000 to reimburse the general fund for two recent property acquisitions; staff said proceeds from future sale or redevelopment will reimburse principal and interest. The motion passed 7–0.
Finance Director Quan Wong sought authority to issue taxable limited-tax general obligation bonds up to $3,600,000 to reimburse the city’s general fund for principal and interest paid on two recently acquired parcels intended for future development. Wong said the city solicited competitive bids and received a proposal with an approximate 5.1% borrowing rate and that repayment is expected from sale or redevelopment proceeds.
Council members probed how semiannual interest payments would be covered, how prepayment would work and the assumptions behind the $3.6 million cap. Wong said interest payments will be made semiannually from the general fund and that the city retains the ability to prepay if proceeds become available. Council moved and seconded the recommendation and the roll-call vote recorded the measure as passing 7–0.
