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Council authorizes up to $2.04 million defeasance of 2016 general obligation bonds
Summary
Council approved the first reading of Bill 4049 to defease up to $2,040,000 of the 2016 general obligation bonds, which staff said would save approximately $150,750 in interest; the defeasance is planned on or about Dec. 1 using funds currently held in the debt service fund.
The council approved the first reading of Bill 4049 on Aug. 10 to authorize the defeasance (redemption) of a portion of the city's 2016 general obligation bonds.
Special finance counsel Sarah Granath (Gilmore & Bell) told the council the outstanding balance of the 2016 GO bonds is $5,260,000 and that the ordinance would allow defeasance of not more than $2,040,000, targeting the 2029 and 2030 maturities. Granath said the city anticipates interest savings of approximately $150,750 and that the transaction would occur on or about Dec. 1, to be funded from the debt service fund balance (packet shows $6,136,323). Council approved the first reading with a unanimous vote, 7‑0.
Councilmembers asked about fund minimums and the timing of call periods; staff confirmed the balance and that routine call windows determine the opportunity to defease. The city noted that defeasance could preserve future bonding capacity and modestly roll back the debt-service levy.
