03-19-2019 BondingCouncil Rules of Procedure Ethics Code
SCORE Jail Bond Financing
City Council Meeting
March 19, 2019
SCORE Capital Debt
In 2009, the City along with 6 other municipalities entered into an interlocal agreement (ILA) to finance, build, and operate a new jail
Our portion of this capital debt is 18% of the total capital cost.
SCORE Capital Debt
In 2018, after studying the costs to participate in the SCORE jail versus using other contract jail facilities, City Council followed staff’s recommendation to give notice to SCORE that
we would be removing our prisoners from the facility starting January 1, 2020.
Even with the “sunk cost” of debt service for our portion of the capital used to build the SCORE jail, the City will see significant cost savings by housing our inmates in contract facilities.
SCORE Capital Debt
The SCORE Administrative Board currently has SCORE staff working with their bond counsel to pursue cost savings that will come from paying off the current capital bonds and re-issuing
them at current rates.
SCORE Capital Debt
Because SCORE is planning on re-issuing the current outstanding debt, this is an opportunity for the City to choose to issue our own bonds independently to pay off our portion of the
SCORE debt.
This does not relieve the City of the debt, but does offer some advantages over keeping our portion of the SCORE debt mixed with the rest of the SCORE debt.
Advantages
City has a better bond rating than some of the SCORE member cities, which may result in a better rate for our portion of the debt than SCORE can get.
City is free to structure the bonds to best suit our needs
Duration
Can combine this debt with others to see savings on transaction costs
In the future, if the City wants to call the bonds, it will be up to City Council, not the SCORE board.
Costs
Finance estimates that, depending on the interest rate on the date that the bonds are sold, refinancing may save the City $1-2 million over the life of the bond.
Questions?