2017.10.11 Council Agenda Item 03
Summary
Order authorizing up to $18,850,000 of the Town’s General Obligation Bonds to refinance and refund a portion of the Town’s outstanding 2011 General Obligation Bonds.
A public comment period will be included (3 minutes).
ACTION: Council action is anticipated.
Description
The 2011, 20-year bonds in the amount of $37,735,000 were issued to finance a portion of the costs to construct and equip the new elementary school. The remaining outstanding $18,850,000 of bonds maturing in 2022-31 carry an average interest rate of 3.93%. It is proposed to refund (refinance) these bonds through an issuance of up to $18,850,000 if the Town’s 10-year General Obligation Bonds, locking in and estimated average interest rate of about 2.40% and saving an estimated $910,313 in net interest costs over the next fifteen years. The State of Maine has been subsidizing roughly 84% of the debt service for these bonds and will realize an estimated $766,149 of the total $910,313 in net interest cost savings; the Town will realize the remainder or $144,164 in net interest cost savings. Attached documents include a bond refunding analysis and a schedule of the estimated net savings.
