Lake City Report -
Aug. 13, 2010
City Utility Bonds up-up
and away
$600,000 airport terminal grant on the way
Columbia County, FL (Posted August 15, 2010 05:00
pm)
by City Manager Wendell Johnson and
staff
From City Manager Wendell Johnson
City Utilities Bond and Waste Water
Treatment Plant Project
The City’s Kicklighter WWTP and Utility
System upgrades project funding reached a major
milestone this week with the Sale of the Utility
Bonds. The bonds provide for $18,000,000 in
Utility Construction funds over the next two
years.
Links for the
Policy Wonks:
Financial Advisor Jim Gollahon's:
•
August 8th presentation to the City Council.
•
How much does it cost to sell twenty eight
million dollars worth of bonds?
Funding Highlights
• The City’s
Series 2010 A&B utility bonds were marketed and
sold on Tuesday and Wednesday August 10th and
11th.
• CM Johnson and Financial Consultant
Gollahon attended the Bond pricing process in St
Petersburg, while Administrative Service
Director Cason and Finance Director Tyre
participated by phone.
• The City’s underwriting team was led by
Raymond James & Associates as senior manager and
RBC Capital Markets, Southwest Securities and
Stephens & Co. as co-managers.
• The team was able to take full advantage
of the City’s high credit ratings and a strong
rally in the bond market.
• The combination of the excellent
marketing efforts of the underwriters, a strong
demand for the bonds and very favorable market
conditions allowed our underwriters to lower the
interest rates twice from the preliminary to
final pricing.
• The refunding of the Series 1998A and
Series 2000 bonds realized $727,151 of present
value savings or 7.6% of the par amount of the
refunded bonds. This is $102,000 more than we
estimated on August 2nd.
• The true interest cost on the Series
2010A refunding bonds, including all issuance
expenses, is 4.10% which is .10% less than our
August 2nd estimate.
• The demand for the Series 2010B
Build America Bonds (BABs) was much greater
than we expected.
• The true interest cost on the BABs,
including all issuance expenses and net of
subsidies, is 4.21%, which is .34% less than our
August 2nd estimate.
• The BABs will save a total of
approximately $3.7 million or about $123,000 per
year more than if the City had issued
conventional tax-exempt bonds for the wastewater
projects. This is substantially higher than our
August 2nd BABs vs. tax-exempt savings estimate
of $1.5 million or $50,000 per year.
• The final BABs interest rate, net of the
subsidy, is about .77% less than the rate would
have been for a tax-exempt issue, again much
better than our earlier estimate.
• A pre-closing and closing is scheduled
for August 25-26 in Lake City.
• Congratulations on a very successful team
effort and financing!
Florida Airports Council Annual Conference
Mayor Witt, Councilman Ward, Airport Director
Sawyer and I attended the 41st Annual Conference
& Exposition of the Florida Airports Council in
Tampa, Florida, held from last Saturday through
Wednesday of this week.
Hosted by the Tampa International Airport,
the Sarasota-Bradenton International Airport and
the St. Petersburg-Clearwater International
Airport, the event provided an outstanding
program on a variety of topics and challenges
that currently face the aviation industry,
commercial and general aviation alike. A variety
of innovative programs were introduced to assist
Florida airports get through tough times.
City Awarded $600,000 Airport Terminal Grant
The agreement from the Federal Aviation
Administration (FAA) for the $600,000 grant Lake
City has been waiting for is in. The City
Council is being requested to approve the FAA
agreement at the August 16th regular meeting.
The Council will also consider a contract
award to Mandese-White, Inc. for construction of
the City’s new Air Terminal. Work on the
terminal will begin in September.
The City Staff Report is available in pdf format
here.
