Favorable market trends prompted Scottsdale financial advisor Piper Jaffray to suggest refinancing a portion of the city’s General Obligation debt in order to decrease Scottsdale debt financing costs, and benefit the taxpayers who finance payment of the current bonds.
The City Treasurer’s Office recommends authorizing staff to issue up to $165 million of General Obligation refunding bonds, according to a Feb. 3 staff report.
Approving the sale of these General Obligation refunding bonds will be discussed Tuesday, Feb. 3 during the Scottsdale City Council meeting at City Hall, 3939 N. Drinkwater Blvd.
Like refinancing a home’s mortgage, refinancing city bonds will reduce annual debt by prepaying existing debt and issuing new debt at a lower interest rate, the notice explains, the report states.
Because some of the bonds recommended for refinancing are supported by property tax payments or preserve excise sales taxes, the treasurer’s office states there will be a positive impact on all Scottsdale taxpayers.
According to the staff report, financial strategy requires issuance of the refunding bonds save taxpayers a minimum of 3 percent, or $1 million, in debt service savings.
The notice goes on to estimate bond refundings will exceed the minimum requirement.
The sale of refunding bonds supported by property tax will positively affect the secondary property tax rate and levy, states the notice.
The sale of the other refunding bonds, those supported by Preserve excise sales taxes, will reduce preserve debt service payments, the notice continues.
Editor’s note: The above photograph is of Scottsdale City Council and provided by the city of Scottsdale
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