HoweEnterprise.com
December 23, 2019
City refinances bonds
The Howe City Council listens to Paul Jasin, a financial advisor for Specialized Public Finance. Back in September, the Howe City Council voted unanimously to approve a $300,000 capital improvement project while at the same time refinancing the city's existing 2009 Certificates of Obligations. The council opted for a 15- year term that could be called at the end of the tenth year. The $300,000 project improvement is for water and wastewater improvements, storm sirens and street improvements. Based on the review of the city financials by Specialized public Finance, Inc. (SPFI), along with the city's tax rate of $0.57, a recommendation was made for the organizations to work closing with prospective lenders. The 15year term would include the $1,351,463 in existing debt service and would include $335,000 in new project funds plus estimated bond issuances. Jasin told the council in Monday’s meeting that SPFI sent out bids to over 50 banks. Bank United presented an offer of interest rates significantly lower than what was discussed in September. The tax rate on interest and sinking was adopted at $0.092912 and would increase slightly to $0.104 assuming no growth over the 15-year term. Any residential growth in Howe would assume a lowering of that
portion of the tax rate. The term is based off an estimated 3.5 percent interest rate, however, Jasin told the council on Monday that Bank United’s interest rates offered were 2.79 percent for the Certificates of Obligation on a 15 -year term and the GO bonds came in at a 2.30 percent rate with an 11-year term. That creates a savings of around $12,000 per year for the refunding bonds and the new debt service savings are around $28,000. Jasin said the expected closing date is on January 14 and the city council approved a motion to move forward on the refinancing of the bonds. Also at the council meeting, Mayor French recognized Public Works Director David Wortham who will be retiring on Jan. 3, 2020 after a 44-year career with the city. French acknowledged Wortham as the brains of the public works department and stated that the city would keep his cell phone number in case of emergency.
David Wortham was presented a 40-year plaque in 2015.
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