When the ball park bonds were originally sold the city told us they would make a large bullet payment of $17.4 million on the bonds in 2023.
We wrote about that in No Principles back in November of 2013.
No one should be surprised that city council knew that coming up with an extra $17.4 million dollars all at one time would not be possible.
The new management at the city has taken the steps necessary to keep us from having to cough up the money in 2023.
The April 11, 2016 meeting of the Downtown Development Corporation (city council in sheep’s clothing) gave permission to sell refinancing bonds. The refinancing bonds will be used to buy back bonds that were issued in 2013 and thus eliminate the bullet payment.
Interest rates have gone down and money can be saved by locking in a lower rate through refinancing.
Unfortunately they felt the need to finance the $17.4 million also.
From the refinancing resolution:
the aggregate amount of payments to be made on the Series 2016 Bonds shall not exceed the aggregate amount of payments that would have been made on the refunded Series 2013 Tax Exempt Bonds had the refunding not occurred by more than $13,285,000, net of any issuer contribution
Even with the interest savings we still are going to pay up to another $13.2 million in interest because of the need to finance the $17.4 million bullet payment.
The problem here is that financing numbers did not work back in 2013. The city put the $17.4 million in as a bullet payment to make it look like they financing was viable.
Does it ever end?
We deserve better