Pool bonds sold at 1.93% interest rate

Taxpayers in the City of Grant won’t be paying as much as they expected on the  bond issue for a new pool.

At last week’s May 25 city council meeting, council members gave the go-ahead to sell $1.835 million in 15-year bonds to finance the $2.582 million cost of the new pool. 

In November 2018, city voters approved a bond issue for $2.4 million.

At that time, the interest rate on bonds was over 3%. Since then, rates have continued to decline. 

Tobin Buchanan, the bond representative for First National Capital Markets of Omaha, told council members he thought the bonds would sell in the low 2% range. 

He completed the sale of the bonds by the weekend, with an average rate of 1.93%.

City Superintendent Edward Dunn said they considered both 15- and 20-year term bonds. 

By shortening the term to 15 years, Dunn said it saved the city about $177,000 in interest. The drop to 1.93% will save another $30,000 in interest cost. 

Annual debt service on the new bonds will run about $142,000. 

In 2012, voters approved a one-cent sales tax, of which half was designated for the pool project. 

That annual revenue has been averaging around $80,000. That money will be applied to annual bond payments, with the balance being paid through local property taxes approved by the voters.

An additional reserve of $685,000 in sales tax revenue for the pool has built up since 2012.

In addition, pool supporters have raised $270,000 in donations and pledges.

The bid cost does not include engineering fees and some additional items planned for the pool. Those will be paid from the sales tax reserve and the donations. 

The bonds cannot be paid down for five years. After that, sales tax reserves could be used to retire some of the bonds earlier, saving interest costs.