by Frank Lee
operations@thenewsleaders.com
The St. Joseph City Council recently authorized the issuance and the sale of bonds to build a new government center that could open near Colts Academy as early as February.
Monte Eastvold of Northland Securities was at the June 7 meeting to discuss the 2016 general-obligation capital-improvement-plan bonds and the sale of $4.28 million in bonds.
“Because the size of the issue, we recommended we have the issue rated by Standard & Poor’s,” Eastvold said. “That would help the marketing effort. With a good rating, you get some reduced interest rates.”
S&P reaffirmed the city’s bond rating as “AA- with a stable outlook.” The rating is “a testament of the financial decisions the council has made in recent years committing to strong financial health.”
The rating provides the city with more bond buyers bidding lower interest rates.
“The rating is very good news,” Eastvold said. “They said the economy is doing very well . . . and your debt is being retired relatively quickly, so all in all, a very good report (by S&P).”
The funding sources for the construction project include debt levy and use of reserved balances from the 2011 general-obligation capital-improvement-plan bonds.
“They were pleasantly surprised as to what was occurring in and around the city with all the development and future plans that are in the works,” Eastvold said of Standard & Poor’s, an American financial services company that publishes analysis on bonds.
Northland Securities will buy the bond issue from the city, market it and return the bond proceeds to the council at closing in July, Eastvold said.
“A month ago, we were talking about an underwriter’s discount at 1.96 percent of the face value of the bond issue,” Eastvold said. “That is the fee that comes to the underwriter – in this case Northland Securities – and that would pay for our overhead, for our commission for the salespeople to sell the issue on behalf of the city.”
That cost was lowered based on initial marketing to some interested investors, and “there was great interest,” Eastvold said.
“It’s not going to be as hard of a sales job that we were first thinking,” Eastvold told the council.
The 18,000-square-foot new government center will provide more space for the police department and city administration and may someday be connected to Colts Academy, which is slated to be converted into a community center.
Monte Eastvold of Northland Securities hands out documents to the St. Joseph City Council at the June 7 meeting to discuss the 2016 general-obligation capital-improvement-plan bonds and the sale of $4.28 million in bonds to fund the construction of a new government center.
Monte Eastvold of Northland Securities gives a presentation to the St. Joseph City Council at the June 7 meeting about the 2016 general-obligation capital-improvement-plan bonds and the sale of $4.28 million in bonds to fund the construction of a new government center.
Monte Eastvold of Northland Securities hands out documents to the St. Joseph City Council at the June 7 meeting to discuss the 2016 general-obligation capital-improvement-plan bonds and the sale of $4.28 million in bonds to fund the construction of a new government center.
