Fort Dodge hits $814K jackpot
A move to refinance about $8.2 million worth of public debt has yielded a payoff even greater than what Fort Dodge officials had hoped was possible.
Previously, City Manager David Fierke had estimated that refinancing could save $500,000 over a decade.
But on Monday, the city’s financial advisers went to the bond markets and came back with a deal that will save city taxpayers $814,911 over 10 years.
The refinanced bonds have a true interest rate of less than 1 percent, according to Jon Burmeister, managing director of Public Financial Management Inc., of Des Moines. He said the true interest rate is .8869 percent. That, he said, is ”significantly lower than what we targeted.”
The bonds being refinanced had an average interest rate of 4.1 percent, according to Burmeister.
The City Council on Monday unanimously approved refinancing the bonds with Piper Jaffray, of Kansas City, Mo. Councilman Dave Flattery participated in the meeting by phone.
”This is a true savings to our taxpayers,” Mayor Matt Bemrich said. ”That is putting money back in your pockets.”
He said the portion of property taxes designated for paying off bonds can be reduced in the future because of the refinancing.
Burmeister calculated the property tax debt levy savings at $335,443 over 10 years.
He said 10 bond underwriting firms submitted proposals for the city’s refinancing effort.
He added that Moody’s Investors Service has retained the city government’s favorable Aa3 rating, which is considered by underwriting firms when they submit proposals.
”They’re really taking note of the good work you’re doing here,” he said.
The council’s action consolidates and refinances these bond issues:
- A 2003 hotel/motel tax bond with about $1.1 million remaining to be paid.
- A 2003 general obligation bond issue with about $460,000 remaining to be paid.
- A 2004 general obligation bond issue with about $1.5 million remaining to be paid.
- A 2006 tax increment financing revenue bond with about $2.2 million remaining to be paid.
- A 2008 general obligation bond issue with about $1.5 million remaining to be paid.