Council Authorizes Issuance and Refunding of Bonds
Published:
<< Back to NewsMon 8/16/21
Since 2012, Addison voters have approved several bond programs to fund various projects throughout Town. Once voter approval is secured, the City Council is authorized to issue bonds to pay for those projects. At its August 10 meeting, the City Council approved the issuance of $16,095,000 in 2021 General Obligation Bonds to fund the following:
- $8,000,000, from the authorized $16,000,000 ($3,000,000 issued to date), from Proposition 1 of the 2012 Bond Election for reconstruction of Midway Road. Council awarded a construction contract to Tiseo Construction on December 8, 2020. The project is currently under construction with an anticipated completion date in Fiscal Year 2024.
- $3,145,000, from the authorized $6,723,000 ($365,000 issued to date), from Proposition C of the 2019 Bond Election for parks and recreation improvements and facilities. Council approved a contract for the design of locker room, pool, and gymnasium and track improvements to the Addison Athletic Club on June 9, 2020. Design is nearing completion with construction anticipated to begin in Fall 2021 with an estimated construction timeline of 12-24 months.
- $4,950,000, from the authorized $7,395,000 ($140,000 issued to date), from Proposition D of the 2019 Bond Election for improvements to existing municipal buildings.
The financial impacts of the bond issuance were less than the projections included in the materials provided to the public as part of the 2019 Bond Election process. The bonds were issued for 20 years with an interest rate of 1.769% as well as a $1.47 million premium which resulted in a lower issuance principal amount of $14,850,000. After payment of bond issuance costs, the Town will still receive the $16 million needed for these projects.
At its August 10 meeting, Council also approved the refunding (i.e. refinancing) of the 2013 General Obligation Bonds and 2013A General Obligation Bonds at a rate of 1.474%. The interest rate will result in a debt savings of more than $120,000 a year, with a Net Present Value savings in excess of $1.3 million, over the remaining life of the debt.
