Wearing a cowboy hat to reinforce his point, Oakdale City Manager Bryan Whitemyer pioneered the Monday, March 16 Oakdale City Council meeting, telling everyone that at no time the city was ever considering changing its ‘Cowboy Capital’ motto (see related story on this page).
Whitemyer added that he was impressed with the passion of the community when the OTVB topic was presented.
That aside, the council went on to hear three separate agenda items during the evening where city staff proposed the refinancing of six different bond obligations that would save the city thousands of dollars every year and hundreds of thousands over the lifetime of the bond.
In December, the council made a similar move of its Bridle Ridge Development bonds.
The council heard from Ken Dieker of Del Rio regarding the city’s outstanding side fund obligation bonds of the California Public Employees Retirement System.
In 2003, Oakdale was required to “true-up” its unfunded liabilities to reduce volatility in pension costs and issued 20-year bonds to cover the costs.
According to Dieker, the current side fund obligations are on a fixed amortization schedule based at a rate of 7.5 percent with annual payments on the bond ranging over $420,000 a year for a $3.9 million balance.
Under the plan the city’s rate would be knocked down to 4.2 percent, saving over $36,000 a year, and over $390,000 overall, having the bond paid off a year earlier.
Another financial benefit proposed was to pay the bonds obligation quarterly, rather than annually.
“It’s like making an extra house payment a year,” Dieker said. “That money cuts the principal for a faster payment.”
Whitemyer said the estimated $390,836 savings over the course of the bond would go to the general fund.
Dieker also presented a plan to for the reissuance of Tax Allocation Refunding Bonds to refinance four Tax Allocation Bonds of the former Oakdale Redevelopment Agency.
In 1997, 2004, and two issuances in 2011, Oakdale issued bonds for the redevelopment agency, in the amounts of $7.845 million, $13.330 million, $2.55 million and $820,000 respectively.
Based on current interest rates, it is anticipated that refinancing will generate an estimated $7,771,756 in gross savings over the life of the bonds and $370,000 in annual savings, with the city seeing 10 to 15 percent of that savings since it would have to be divided among other taxing authorities such as the schools.
The final bond refinance proposal was presented by Albert Peche of Peche and Associates regarding a refinance of the 2005 Fire Station Bond when the city issued $2.85 million to cover construction costs. The amount remaining is $2.375 million.
The average interest rate on the bond is 4.66 percent and, according to Peche, the refunding rate would be at 3.55 percent lowering the overall debt by nearly $15,000 per year and shortening the maturity date by one year.
The refinancing proposals all passed unanimously by the council.
“A lot of the decisions we made from a year ago put us in position to do this,” Whitemyer said. “I would compare it to the households that have the best financial standings and get the best rates.”
In other action, the council moved forward to apply to LAFCO for annexing Area 3 of Crane Crossing.
If approved, residents in the area would vote on city annexation.
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