The city of Washington is on track to save more than $4.8 million by refinancing of Certificates of Participation (COPs) issued to fund two major projects.
The “net present value savings” will be $4,800,678 under a proposed agreement to refund the 2008 and 2012 COPs, according to a letter from City Administrator Jim Briggs.
The 2008 COPs were issued for the Highway 100 widening project. The 2012 COPs were issued by the city to finance a new automated water meter reading system that is being installed now.
During their meeting this week, the city council authorized proceeding with the selection of Edward Jones as the city’s investment banker for the refunding of the 2008 and 2012 COPs.
The council also authorized selecting Mark Grimm of Gilmore & Bell as the city’s bond counsel on the issue.
“We feel this is in the best interest of the city and taxpayers at this time,” Briggs told the council.
“To save $4.8 million is a great thing,” remarked Councilman Tim Brinker.
“This is a great deal for the city,” said Mayor Sandy Lucy.
The city considered proposals from Edward Jones and two other investment firms — Stifel Nicolaus and Piper Jaffray — for the refinancing.
Edward Jones provided the lowest net interest cost of 3.12 percent, and the highest net present value saving, Briggs noted in his letter. The firm also provided a call feature of five years compared to eight years for Piper Jaffray and 10 years for Stifel Nicolaus, he said.
The city entered into a cost-sharing agreement with MoDOT for the Highway 100 four-lane project.
The city originally entered into a lease agreement with a group of local banks to finance the new water metering system over 15 years. Under that agreement, the city can pay off the lease early without any penalties.