Timnath reports oversubscribed recreation center bond sale with 4.52% borrowing cost

Timnath finance staff told the Town Council on May 26 that the recreation center bond sale and certificates of participation closing were successful, with more than a $5 million bond premium, a 4.52% all-interest cost and an oversubscribed sale that produced favorable terms.

During the finance report, Stephanie Moss said the town’s rate was favorable and that revenue is expected to exceed debt service. She said that would allow the town this year to put a portion of the money into reserves for future replacement and operating costs at the recreation center.

Council Member Dennis Strachota called the interest rate "a very positive outcome" and said the bonds being oversubscribed was encouraging. He asked whether stronger revenue could allow the town to pay off the bonds early, which in turn could let the town suspend the increased sales-tax rate tied to construction of the building.

Moss said excess revenue would go into a reserve fund and that once the bonds are callable after 10 years, the town could consider prepaying them and reducing the sales-tax increase accordingly.

Council Member Jeramie Holt also thanked the underwriting team — Stifel, RBC and UMB Bank — saying they were instrumental in securing the favorable terms. Later in the discussion, Strachota thanked finance staff for adding a comparison column to the revenue report showing budget versus actual figures from prior years, saying it helped show whether revenue was running ahead or behind.