• Current recessionary pressures on the economy have led to a historically low interest rate environment. As a result, two City bond issues meet the criteria for the City to refinance and take advantage of these low interest rates.
• The 2010 outstanding bond issue is a candidate for refinancing. By refinancing the callable maturities of the 2010 bond issue, the City will reduce its future debt payments by approximately $2 million over the life of the bond issue, or by approximately $132,000 per year.
• The 2011 outstanding bond issue is a candidate for refinancing. By refinancing the callable maturites of the 2011 bond issue, the City will reduce its future debt payments by approximately $870,000 over the life of the bond issue, or by approximately $60,000 per year.

Goal 9: Build the strongest, most resilient economy in the region.

In December 2010, the City issued $13,410,000 in Limited Tax General Obligation (LTGO) and Refunding bonds to partially refinance the 2001 LTGO bonds and to provide funding to purchase City Hall at 415 W. 6th Street. The bonds have an average interest rate of 4.502%, and currently $7.99 million is outstanding. Of this, approximately $7.65 million in existing bonds will be refunded by issuing approximately $6.9 million in refunding bonds. Overall, by refinancing the bond issue, the City will realize more than $2 million in debt service savings over the life of the bond issue, or about $132,000 per year. The net present value savings is approximately $1.77 million. The average interest rate on the refunding bonds is estimated to be 2.15% compared to approximately 4.5% on the old bond issue. General tax revenues in the General Fund support the debt service payments for this bond issue. The final maturity of this bond issue is December 1, 2035.

In June 2011, the City issued $9,600,000 in LTGO bonds (2011A) and $915,000 in LTGO taxable bonds (2011B) for a combined total of $10,515,000. The 2011B taxable bonds were paid off in December 2015. The proceeds of both series were used to fund transportation projects, including the Waterfront Access Project. The bonds have an average interest rate of 3.93%, and currently $8.03 million is outstanding. Of this, approximately $7.29 million in existing bonds will be refunded by issuing approximately $7.495 million in refunding bonds. Overall, by refinancing the bond issue, the City will realize more than $870,000 in debt service savings over the life of the bond issue, or about $60,000 per year. The net present value savings is $719,000. The average interest rate on the refunding bonds is estimated to be 2.75% compared to approximately 3.93% on the old bond issue. Debt service is supported by the General Fund up to $220,000 per year from the Local Revitalization Financing sales tax credit, and the remaining annual debt service is supported by the increased property and sales tax revenues from the Waterfront development. The final maturity of this bond issue is December 1, 2035. The new refunding bonds for this issue are anticipated to settle in 2021.

The ordinance allows for the not-to-exceed amount to be greater than the actual amount estimated to be issued, simply to provide flexibility for the bond sales. Depending on market conditions, the City could elect to issue bonds through a public sale, or through private placement, or a combination of both to maximize the savings.

The refunding will allow the City to realize approximately $2.8 million in debt service savings over the life of the bond issues. The net present value of the savings is estimated at $2.4 million.