Clear Lake council approves refunding bond to save $20K on McKesson economic development bonds
CLEAR LAKE — The City of Clear Lake will be saving $20,000 after the City Council last night approved the sale of a $715,000 Taxable General Obligation Refunding Bond connected to the McKesson development project.
The city previously issued a $1.6 million economic development bond in 2014 to facilitate a portion of the costs relating to the McKesson development. The city at the time reserved the right to prepay the outstanding balance starting in June 2019, and based on the positive, preliminary feedback from the banks in the community about the favorable interest rate environment, the council recently decided to move forward.
City Finance Director Creighton Schmidt says Clear Lake Bank & Trust submitted the winning bid at 0.35%. “This is a net savings of just over $20,000 for the remainder. We’re going to keep the same terms so it will still hit maturity at that June of 2024, and the interest over those remaining years is $4400, so next to nothing when you have an interest rate that is that favorable.”
In separate action last night, the council gave final approval to a $1.2 million economic development bond that would be used for the Marriott hotel project in Courtway Park, and a $600,000 corporate purpose bond that will be used by the city to purchase property from Cerro Gordo County across from the city’s aquatic center for a park development project, as well as purchasing the old Woodford Wheeler building on North 4th Street as part of a library expansion project. C
lear Lake Bank & Trust had the low bid on the hotel bonds at 0.55% while MBT Bank had the low bid for the land acquisition bonds at 0.42%.