|City refinances bonds to take advantage of higher credit rating|
|Written by News Desk|
|Sunday, 03 August 2014 13:25|
By BRIAN HODGE
The City of Millbrook recently saw its credit rating increase two levels from "A" to "AA-" while that may not seem like much to the uninitiated, it is nevertheless a rare event for a municipality, especially one of Millbrook's size, to increase two levels in their credit rating.
Standard and Poor's said in a report regarding the rating increase that the City of Millbrook demonstrates "strong budget flexibility" and "strong liquidity" which lead to the rating improvement.
Last week the Millbrook City Council took action to reap the benefits of this increase in credit worthiness by voting to redeem bonds, or 'warrants' as they are referred to by financial experts, from 2007 and issuing new bonds at a much lower rate.
The rate on series 2007 bonds, which were issued to fund improvements to the city's sewage system was 3.98%. The rate on the new bonds will be 2.71%. In practical terms the city will save $356,000 of which $333,000 will go to the city after expenses and fees related to the bond refunding. According to David Coin of Merchant Capital, the firm hired by the city to handle the transaction, the money must be used on capital (building/infrastructure) projects because that was the purpose of the original bond issue.
Fred Watts, City Council President, told The Indy that part of those funds would likely be used to address issues at the building at Legacy Park on Deatsville Highway.
"That building gets a lot of use and the condition of the building needs to be addressed," Watts said.
The building at Legacy Park was originally located on the other end of town on the Alabama River Parkway as the office for a driving range business. The building was moved to Legacy Park, after the park was established around 2001.
In other business the council amended the municipal code of ordinances to adopt recommended changes to several items, among them fence permits and guidelines. The council also granted retiring police officer J.C. Little his badge and pistol.
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