Council approves sale of sewer bonds

Springfield Finance Director Mary Mannix Decker said the time is right to take advantage of a favorable bond market, and Springfield City Council members agreed.

At last night’s council meeting, members unanimously passed the first of two related bills, which allow the city's finance department to move forward with the sale of up to $8 million in general obligation sewer bonds.

“The general obligation bonds that you are considering tonight were approved by voters in 2005 for the extension of sanitary sewers throughout the city. Since 2005, we’ve been issuing installments of these bonds as Clean Water Services has finished up the work and then moves on to another section,” Decker said at the meeting. “Of the amount we are looking at –  around $8 million – $3 million would be what we call ‘new money,’ which would be used for the extension of the sewers.”

She said about $4.5 million of the proceeds would be used to refund older general obligation bonds from 2001 and 2003.

“Because we expect the interest rate will be lower, we will experience a savings on these bonds. We are not extending the terms,” Decker said. “We are just taking advantage of the interest rate differential.”

The approved bill authorizes a competitive sale, so Decker said she doesn’t know how much savings the city could realize, but she estimated after the meeting it could save around $150,000 per year on bonds that mature between 2019 and 2021. The companion bill, which received its first reading last night, formally issues the bonds that will stay open for bid until July 21, she said.

“At our next meeting, … we’ll have the results of the sale. We’ll tell you the interest rates the bonds would be issued at,” Decker told council, adding the amount to be refunded would depend on the interest rates the city can secure through the competitive sale.  

No members of the public spoke to either bill. The ordinance to issue the bonds is scheduled to receive a second reading and vote at the July 21 council meeting.