Board members of the Liberty County Public Facilities Authority and city Chief Financial Officer Kim Ryon met Tuesday morning in Mayor Jim Thomas’ office to work on refinancing.
After some discussion, board members agreed to refund the bonds issued by the PFA in May 2010 to finance the construction of city hall and a public-works facility on E.G. Miles Parkway for a total of $9.51 million.
Ryon said about $500,000 of Special Purpose Local Option Sales Tax funds were used toward construction costs. She said the amount being refunded is $5.61 million, which will be refinanced through AmerisBank with a rate that allows the city to save more than $1.2 million and pay off the loan five years early.
Ryon and Hinesville legal counsel Richy Braun likened the refunding and refinancing of the bonds to refinancing a home loan to get a lower rate and pay it off early.
“In March, city council approved a resolution to do the refunding,” Ryon said. “Since the Build America Bonds were actually issued by the Public Facilities Authority, we had to formally ask the PFA (in April’s city council meeting) to recall the bonds. The resolution the PFA acted on today did that.”
Attending the meeting with Ryon, Braun and Thomas, who also is a PFA board member, was PFA Vice Chairman Paul Johnson, PFA Secretary James Rogers, member Matt Cardella, PFA legal counsel Kelly Davis and bond counsel Jim Pannell. PFA Chairwoman Renea Camper took part via conference call.
Prior to Camper bringing the resolution to a vote, Pannell told her and other board members that there were two issues he needed to discuss with them. These issues involved the timing of the resolution vote.
“In regard to the timing of this, the mayor and council adopted a request asking the PFA issue a resolution refunding the bonds,” Pannell said, after noting the interest rate offered by AmerisBank was significantly lower than the Build America Bonds. “It was our intent to adopt the resolution today and get underway toward validation and close that bond issue in May or early June.”
Pannell said the federal government’s next interest-payment date for the Build America Bonds is Aug. 1. He said if they closed this transaction before that interest payment, it could cause some confusion with the federal government. He suggested proceeding with validation and recalling the bonds Aug. 3. The authority then would give a notice of redemption through the bond registrar to redeem the bond Sept. 9.
A second issue he noted was the 2.7 percent interest rate currently offered by AmerisBank. Interest rates could rise over the summer, he said. For purposes of the proposed refinancing, that rate now will be listed as 2.9 percent. Ryon said the intent of AmerisBank, however, is to stick with the
The vote was unanimous, with Rogers, also a vice president at AmerisBank, excusing himself from the room during the vote.
The PFA then approved another motion to adjourn.