Eagle hones $6.1M bond issue for riverfront project
EAGLE — In less than one month’s time, the town of Eagle should have a few million dollars on hand to finance its Eagle Riverfront Park plan.
Eagle will offer a tax-exempt municipal bond issue, backed by a 0.5 percent sales tax recently approved by Eagle voters, exclusively to Eagle property owners and residents today. The bonds will then be offered to the general public on Tuesday. The bond issue is expected to close on Sept. 9.
On Aug. 20, members of the Eagle Town Board discussed the upcoming bond issue with consultant Ken Marchetti. The discussion tackled one of the central questions still outstanding for the bond sale — just how much money does Eagle hope to generate?
Marchetti presented three scenarios — a $5.4 million issue, a $5.8 million issue and a $6.1 million issue. Those amounts would generate project funds of $5.1 million, $5.6 million and $5.9 million, respectively.
Marchetti noted all three scenarios feature the same maturity schedules and early payment options. He said the difference is really how much debt Eagle wants to undertake.
“If we have more money, we spend more money and that’s not always the best thing to do,” noted Town Board member Paul Witt.
Witt asked what specific projects could be completed if the town maximized its debt option. Town planner Tom Boni noted that a connection between Chambers Park and the new Eagle Riverfront Park is the likeliest candidate.
Other Town Board members said that it made sense to borrow now, when interests rates are low. Additionally, they noted the town is confident it can manage the annual bond payments — $277,000 for the $5.4 million issue, $305,000 for the $5.8 million issue and $329,000 for the $6.1 million issue. The additional 0.5 percent sales tax is conservatively estimated to generate $417,000 annually.
“Whenever you start a project, one of the worst things you can do is underfund it,” said Town Board member Kevin Brubeck.
“This will probably be the signature project for the town of Eagle for some time to come,” said Mayor Anne McKibbin. “We don’t want to hamstring it.”
The board voted unanimously to proceed with the $6.1 million bond issue option.
Next week’s sale
A summary of the expected terms of the bonds includes the following:
• Serial bonds available in $5,000 denominations, are backed by the recently implemented 0.5 percent town of Eagle sales tax.
• The town is currently rated A3 by Moody’s Investor Service.
• The bonds will pay interest semi-annually on June 1 and Dec. 1 of each year.
• The bonds will mature serially beginning on Dec. 1, 2017 to Dec. 1, 2046.
• Yields will float with the market until Aug. 30 when they will be locked. Based on current rates it is expected that the yields on the bonds will range from 0.83 percent for the 2017 maturity to 3.67 yield to call date (2.57 yield to maturity) on the 2046 maturities.
Anyone interested in more information on the bonds or on specific interest rates can contact the underwriter representative, David Freie, at D.A. Davidson & Co. by phone at 303-764-5779 or by email at DFreie@dadco.com.