The City Council on Thursday unanimously approved a resolution to move forward with a plan to use Pinnacle Public Finance to refinance the bond. The bond was used to fund part of the city’s portion of the Hickory Log Reservoir project.
Financial advisors Robert Morrison and Courtney Rogers of Davenport and Company, who were appointed to analyze the refinancing of the 2009 bond issue, said the city received four responses to receive a direct bank loan and three public offerings for the refinancing.
Morrison and Rogers suggested the council accept the bid from Pinnacle Public Finance, which offered a 2.9 percent interest rate that was locked in for the duration of the loan. The original rate on the bond was about 5 percent, according to Chief Finance Officer Nathan Ingram.
Rogers said they decided to split the 2009 bond from a 2005 bond in order to achieve a better rate. The 2005 bond of $10.5 million was also used for the reservoir project.
“The 2009 bond issue has the biggest potential spread of a lower rate, so we wanted to go ahead and start with the refinancing,” Rogers said. “With Pinnacle Public Finance, we have the opportunity for a fixed rate that is set for the entire 18 years and the total amount being refinancing is about $5.5 million, because there were $2.2 million in proceeds from the project. We’re going to return that money back over. The net savings the city will see on that $2.2 million is around $1.2 million.”
Since the council approved Pinnacle Public Finance, the next step would be to hold a public hearing Sept. 2.
In other business, the city:
• Announced the council retreat will be from 8 a.m. to 5 p.m. Aug. 15 at Woodbridge Inn in Jasper;
• Approved a request from KAM Contracting to perform after hours work on Marietta Road. Cummins said the project is expected to end in October; and
• Approved a request from Racetrac on 9665 Knox Bridge Highway to perform after hours work on a remodeling project of the store.