Menu
Debt refinancing to save city $800k over next 20 years
McCOOK, Neb. -- Final figures for a debt refinancing effort by the city indicate it should save $824,588 over a 20-year period, or slightly more than $41,200 annually, according to city staff.
The savings stems from the issuance of $10 million in Combined Utilities Revenue Refunding Bonds, and subsequent refinancing of water and sewer debt, approved by City Council last month. City Manager Nate Schneider projected an admittedly conservative savings of $400,000 at-the-time and said last night a favorable interest rate of 2.599 percent resulted in an even higher savings amount. He said the City of McCook received an "A+" credit rating which really stood out as an attractive option for investors.
"It was pretty fortuitous that we got the rating that we got and a lot of that goes to the council, credit goes to the council and staff and Jenny [Blankenship] over at PFM [Public Financial Management] and her group. They do a really good job of making sure that the numbers are where they should be at and that we're kind of looking out in future years to make sure that we're taking into account everything," he said.
Schneider indicated nailing down the interest rate was a bit of a challenge. As recent as 24 hours prior to locking it in there was a time when it looked like the refinance effort might be abandoned entirely because of unfavorable rates.
"So, very good news and we're happy to see that we're gonna see a savings on that. Wasn't quite sure where it was gonna be at. The market started changing rapidly, very, very rapidly," he said.
City Council approved changes to parameters of the $10 million bond last month, recommended by Blankenship. The changes including using some $700,000 in cash-on-hand to fund reserve accounts for the bond, as well as removing an acceleration clause.
"We realized it would be more beneficial for us to look at the possibility of funding that with cash on hand. We've gone through and looked at our numbers, we have the cash reserves to do so, so the reserve actually is going to be funded by cash that we currently have," said Schneider at-the-time.
Discussion of the refinancing effort came during the Announcements and Recognitions portion of Monday's regularly scheduled meeting. City Council approved 11 items without discussion as part of the Consent Agenda and one item was scheduled on the Regular Agenda; Council Comments.
Approved Consent Agenda items included:
* The Heritage Senior Center was approved to apply for financial assistance to help with the purchase of a $60,000 vehicle which is intended to improve the public transit system's ability to transport wheelchair-bound clients. The assistance includes $6,000 in state funds combined with another $48,000 in federal funds, leaving the city with a matching cost of $6,000.
The senior center currently utilizes a 2003 Cutaway Chevrolet bus with more than 150,000 miles, as well as a smaller 2011 Dodge Caravan lowered-floor minivan. City staff indicated repairs are becoming costly to maintain the lift on the older bus.
The City of McCook Public Transit provides transportation services to all members of the public within city limits from 8:30 a.m. to 4:30 p.m., Monday through Friday, for a fee of $1 per one-way trip.
* City staff was approved to enter into an agreement with Miller & Associates to design, as well as oversee the bidding process and construction phase for the replacement of approximately 1,000 feet of water main on South 8th Street, from South Street to South 3rd Street and west on South 3rd Street to South 9th Street.
* Councilors received and filed the annual submission of the city's snow and ice control and removal procedures and policies.
* Mayor mike Gonzales reappointment of Shane Fagot to the Housing Agency Board for a term expiring in November of 2021 was ratified.
* An approval recommendation to the Nebraska Liquor Control Commission for an application from the McCook Pizza Hut for manager Greg A. Tatro was approved.
* The McCook Economic Development Corporation was approved for a special liquor license for a mixer at Memorial Auditorium on Nov. 30, 2016.
* Loop Brewing Company was approved for a special liquor license for a Christmas party at Memorial Auditorium on Dec. 2, 2016, as well as for a Christmas party at the Graff Events Center on Dec. 17, 2016.
* The city's claims for the month of October 2016, as published on Nov. 7, 2016, were received and filed.
* Minutes for an Oct. 17, 2016, City Council meeting and an April 13, 2016, Library Advisory Board meeting were received and filed.