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Council hears bond-refunding options for Hatch Park debt; parameters resolution planned
Summary
Financial advisers presented options to refund the privately placed Hatch Park bonds (issued 2022, ~$16.692M). They estimated a 21-year public refunding could yield about $981,000 NPV savings (~6.6%) and asked council to consider a parameters resolution at the next meeting to enable a public sale if markets align.
Council held a work session presentation on options to refund the city's Hatch Park debt, which was privately placed in 2022. City staff and advisers from Zions Public Finance described the trade-offs of a public-market refunding and asked council whether to authorize staff to proceed with preparatory steps.
Advisers said the city issued roughly $16,692,000 of tax-exempt bonds in December 2022 with a 25-year term and a true interest cost near 4.82%. Using market runs produced the prior day, advisers showed a 21-year refunding scenario that projected an NPV savings of about $981,000 (about 6.6% NPV) and average annual cash savings of roughly $68,000. They cautioned markets fluctuate and that a public refunding requires a more complex process (parameters resolution, draft official statement, rating presentation and bond sale) with estimated upfront issuance costs around $115,000 plus underwriting fees.
Council members questioned call protection, ability to lock rates, and timing given upcoming Federal Reserve meetings and elections. Advisers said a parameters resolution allows the city to start the formal process without obligating the city to issue bonds; staff recommended bringing a parameters resolution to the Aug. 18 meeting so the city can act quickly if market windows open. No final refunding decision was made at this meeting.
