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News City and County Mineola City Council approves process to issue debt
News City and County Mineola City Council approves process to issue debt
| Mineola City Council approves process to issue debt |
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| Written by David Chenault |
| Monday, 22 June 2009 18:06 |
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The city approved a resolution to issue certificates of obligation to pay for improvements at the city's water and sewer system Monday night. Ed Moore, a representative from Southwest Securities which oversees the issuance of the city's debt, told the council he expected to obtain a five percent interest rate for a 20-year certificate. He also noted that the city's bond rating was increased around a year ago from BBB to BBB+. In response to Council Member Ken Pearce's question about the effect of that rating increase, Moore said it could help the city receive a lower interest rate. Moore said of the eight companies providing bond insurance a few months ago, seven have gone out of business, leaving only one company. The debt is expected to be paid out over 20 years since, according to Moore, the city is expected to consider a second phase of the same project which could start in a year or two. "I don't want to over burden your debt repayment, so we chose a 20-year amortization schedule even though the city could probably pay off this obligation sooner," said Moore. Instead of a sealed bid process to select the bank providing the certificates, Moore recommended a negotiated process which would allow a little more flexibility in terms of the exact issuance day, something Moore said is helpful in today's "volatile market." The city will advertise the certificates over the next month and the council is expected to meet for final consideration of the certificates on August 3. |
