©2011 Galesburg Broadcasting Co.
| City Council Monitors Bond Issuance |
At Monday night's Galesburg City Council meeting, aldermen heard details regarding the issuance of General Obligation Refunding Bonds.
The ordinance was on first reading, and if the go ahead is given for the issuance, would need to be approved by the same council that approved the ordinance.
The bond issuance would be done as a bank qualified issue. Municipalities get 10-million dollars as tax exempt debt each year as bank qualified.
City Financial Advisor Kevin McKenna says that if the City would issue bonds at non bank qualified, the savings would be cut in half.
"Bonds issued by entities that are small issuers for the year, that doesn't mean the size of the community that just means 10-million or less, they get an extra break and get to deduct some of those carrying costs, that's maybe a third or quarter of a percent on interest rates," says McKenna.
City management will use the funds to save money by refunding the "2007 Series" General Obligation Bonds. The funds received from Series 2007 were used for the construction of the water treatment plant in Oquawka.
The City could reportedly save 375-thousand dollars on the principal amount of "Series 2007" bonds.
For the City's issuance of 9-million dollars in bonds, it would leave about 1-million dollars in tax exempt debt available.
McKenna says there will be significant savings, but the City will always be able to borrow.
"If somebody really came to you with a wonderful economic development project in August and you needed to put in a 4-million dollar road, you can always borrow taxable, and then come January 1st, refinance as tax exempt," says McKenna.
From the discussion, both the council and City administration didn't foresee going over that limit.
Concerns about bond ratings for the issuance of additional debt were quelled. Currently Galesburg has an AA bond rating. |
|
| 02 19 13 by Newsroom |
Click here for the WGIL News Archive
Click here for national news
The following provision applies to all visitors (which shall include persons and representatives of legal entities, whether such representatives are persons or digital engines of a kind that crawls, indexes, scrapes, copies, stores or transmits digital content). By accessing this Web site or digital service, you specifically acknowledge and agree that: (i) Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium; (ii) No Associated Press materials nor any portion thereof may be stored in a computer except for personal and non-commercial use; (iii) The Associated Press will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing; (iv) The Associated Press is an intended third party beneficiary of these terms and conditions and it may exercise all rights and remedies available to it; and (v) The Associated Press reserves the right to audit possible unauthorized commercial use of AP materials or any portion thereof at any time.
