Bond Refinancing Saves Hazelwood $400,000
The Hazelwood City Council approved the deal at its May 16, meeting, along with some other construction related jobs at city facilities.
Wednesday's Hazelwood City Council meeting had a bit of a surprise for residents and council members. Up for final vote was approval of authorizing the issuance, sale and delivery of general obligation refunding bonds (GOs) through Stifel, Nicolaus & Co., a regional brokerage and investment banking firm.
But before council could give its final nod, Hazelwood finance director Lori Helle had to insert an amendment to the bill after deciding to go to market on Wednesday.
Mark Grimm, an attorney with Gilmore & Bell explained the difference in the original bill and the requested amendment to the bill.
"The interest rate environment was extremely favorable to the City of Hazelwood," Grimm said. "The size of the refunding was up-sized slightly to refinance one additional maturity of the refunded bonds.
"The plan had been to refinance bonds maturing in 2017 and thereafter; but because of a favorable interest rate environment, it was deemed appropriate to refinance bonds maturing in 2016 and thereafter instead."
GOs represent a promise by the issuer to levy enough taxes as necessary to make full and timely payments on Hazelwood's debts or to the city's investors.
"If you recall the ordinance required a savings of at least three percent to refinance," said Laura Radcliff, with the public finance department of Stifel, Nicolaus & Co. "Savings on a cash flow basis were $400,919."
The savings were a positive reflection on Helle, who took the finance director position earlier this year.
"I told Lorie today that I was impressed that in her first quarter of employment she's already saved the City of Hazelwood almost a half a million dollars," Radcliff said. "Today was a good day on the market."
When GOs are refinanced at a lower amount, that means taxpayers pay back a lower amount in taxes on the back end.
"This does not authorize any new taxes that have not previously been approved by the voters," said Hazelwood attorney Kevin O'Keefe. "The taxpayers received substantial savings, which will be reflected in a lower tax rate necessary to retire these obligations in years moving forward."
Fee Fee Road Project
Council also approved city manager Edwin Carlstrom's recommendation regarding the city's Fee Fee Road construction project, and heard first reading of an bill contracting CDG Engineers Architects Planners, Inc.
The company is being hired, pending final approval in June, for design and construction services related to the reconstruction of Fee Fee Road south of James S. McDonnell Boulevard leading up to the Hazelwood Logistics Center. The cost: $242,375.
When a public hearing was held in November of last year, proposed Fee Fee Road Improvements included creating one lane of traffic in each direction plus a center turn lane, enclosing drainage and adding a sidewalk on one side of the street.
In other news, Hazelwood City Council gave final approval to:
- Grant a special land use permit for an adult day care facility at 8368 Latty Ave.
- Amend section 405.755 of the Hazelwood City Code relating to appeals to the board of adjustment
- Amend section 405.040 of the Hazelwood City Code by adding a definition of "aggrieved" party
- Amend chapter 405 of the Hazelwood City Code relating to time limits for re-application when approval has been denied or lapsed
- Amend section 405.040 of the Hazelwood City Code by adding a definition of adult day care facility.
- Amend chapter 235 of the Hazelwood City Code by adopting the amended emergency operations plan.
- Contract Landesign for the construction of a retaining wall at Firehouse #2 for $11,682.
- Contract Rhodey Construction for the installation of an exterior insulation and finish system at Civic Center East for $176,300.