In a memo from City Manager Paul Sabiston to council, Sabiston noted he and Finance Director MeLinda Hite spoke with representatives of Davenport & Company on deferring part of the payment.
The balloon payment is $680,000.
Sabiston said in the memo that deferring $250,000 of the payment using today's rates would equal $3,500 a year in additional costs. “The number may increase depending on many factors,” the memo says. “Primarily, if the actual bond interest rate increases, then the city's cost for this deferment will increase slightly. Davenport wanted the city to be informed of all potential consequences of the deferment but agreed that the deferment option was an attractive one at the present rate.”
If the bond rate did increase, the memo says, and the deferment cost increased, the city could pay off the deferred payment and not be subject to the carrying cost.
Sabiston noted in the memo that representatives from Davenport will visit the city in July to present information to council to explain the true nature of the debt while the next meeting will focus on different options to reduce or refinance the debt.
comments
Quoting cwec:
Why are you concerned.....they can pay the late fees with the insurance savings......just say'n
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