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Committee advances $25 million housing-investment bond plan; direct bank loan recommended
Summary
PFM financial advisor presented a financing plan for a $25 million initial issuance to fund DeKalb's Housing Investment Bond Program. The plan calls for a $25M initial draw, an ongoing $15M annual appropriation, a recommended bank loan sale and a 10-year call option; the committee will consider a supplemental resolution on Aug. 25.
Elise Lommel of Public Financial Management, the county's municipal advisor, told the committee the board is seeking approval to fund an initial $25,000,000 to kick-start the county's Housing Investment Bond Program and that the county would provide an ongoing annual appropriation of $15,000,000 from the general fund.
"This is really how we're getting the funds and what the financing is going to look like," Lommel said, explaining the recommended method of sale is a direct bank loan (which avoids bond ratings) and that both 15- and 20-year term options were included in the RFP so the county can select the most advantageous outcome when bids return. She estimated an initial cost-of-issuance near $500,000 and projected total debt service between $37 million and $42 million depending on term choices.
Lommel described the procurement timeline: bids due next Friday, final pricing to be presented at the board's Aug. 25 meeting, housing authority approval expected Aug. 28 and anticipated closing on Sept. 3. Commissioners asked about semiannual interest payments, call provisions at year 10 and impact on debt service; Lommel said semiannual interest is market standard and the 10-year call provides refinancing flexibility if rates fall.
The committee voted to advance the supplemental resolution to the full board for adoption on Aug. 25.
