Second Referendum Bond Issuance Approved at $59M

The District's municipal advisor, Elizabeth Hennessey of Raymond James, gave an update of the market conditions and an overview of the work of the Citizens Finance Advisory Committee (CFAC). She explained that interest rates have been low; the District captured the lowest rates last December in the first issuance of referendum bonds. Due to the low interest rates, the District will pay off referendum debt four years earlier than originally planned.

She said that interest rates have gone up since September, though rates still are near all-time lows. She provided a history of the promise of the referendum, and the plan to accelerate the issuance of bonds to take advantage of low interest rates.

CFAC considered two options:

  1. Issuing the remainder of the referendum bonds over two years ($45M in 2022 and $14M in 2023)
  2. Issuing the remainder of the referendum bonds ($59M) in 2022

Total interest cost would be lower in Option 1 because the $14M debt would be outstanding for one year less. However, if interest rates increase by more than .27% on the $14M issue in 2023, then the lower cost option would be Option 2 – issuing all the bonds now in 2022.

The Board discussed the likelihood of an increase in rates and approved the issuance of $59M in referendum bonds in 2022.

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