By Andrew Edwards
Elmore/Autauga News Staff Writer
A long-awaited moment took place at Prattville’s Tuesday City Council meeting, as councilmembers passed two resolutions that would pay off the remaining one-cent eligible debt.
The debt, which was incurred in the mid-late 2000s, reached $62,598,000 on May 1st, 2011 – the date that the one cent sales tax was initially passed by the council.
From that date until March 1st of this year, the city had paid down $57,118,000. The remaining $5,480,000 could not be paid off at the time or the city would have been subject to early payment penalties.
The first resolution will “call” the city’s 2014 bonds. This allows them to pay off bonds earlier than its maturity date. The 2014-A General Obligation Refunding Warrants were used to refund the City’s 2007 General Obligation Economic Development Improvement Warrants.
The remaining debt balance from the 2014 bonds was $1,030,000. After the resolution passed, the city will be able to pay the money off on September 1, 2021.
“We’ll have the cash on hand by September 1st,” said Daniel Oakley, City of Prattville Finance Director.
Oakley says that the city will save roughly $10,300 in interest from calling those bonds early.
The second of the two resolutions will authorize the retirement and redemption of the city’s remaining 2015 bonds. That debt number is $4,450,000.
It will also establish a trustee agreement with their paying agent. The trustee will then make the remaining debt service payments for the city moving forward.
“This allows us to take that remaining debt off our books. We send them the money that’s needed to make the rest of the debt service payments. The trustee then handles it from there, and it’s placed in an escrow account,” Oakley said.
The city is set to officially have the $4.45 M off the books and in the hands of a trustee by Sept 1 of this year, the same date as the previous resolution.
“I’m going to send out notices to the bond holders to let them know that we’re paying this off early. The money will actually be out of here by August 1st, and it’s officially coming off the books on Sept. 1,” Oakley said.
The city will ultimately save $5,584,421 total in interest savings from bond maturities called early, as well as refundings in FY 2013, 2014, and 2015.
In other news:
City of Prattville Mayor Bill Gillespie recognized the city’s Dixie Youth Single A Rookies at Tuesday night’s meeting. The 5–6-year-old boys will travel to Texarkana, Arkansas to compete in the Regional World Series.
It’s the first time that City of Prattville has sent a team to such an event.
