Tax-exempt municipal bonds are debt obligations issued by public entities
BREVARD COUNTY • MELBOURNE, FLORIDA – During Tuesday night’s meeting, the Melbourne City Council approved a resolution authorizing the issuance of the tax-exempt Water and Sewer Refunding Revenue Bond, Series 2022, at a fixed interest rate of 1.38%.
This was the second phase of a refinancing plan the Council approved in 2020 that will save the city more than $1.8 million over 13 years.
On September 23, 2020, City Council approved issuing the Taxable Water and Sewer Refunding Revenue Bond, Series 2020, which locked in the then-current rate of 1.69% for 2 years.
In doing so, the City achieved an estimated $1,519,500 in net present value savings based on approximately $120,000 in annual debt service savings through 2034.
The 2020 refinancing plan included the future option for the City to exchange the Series 2020 bonds for a tax-exempt Water and Sewer Refunding Revenue Bond, Series 2022, at a fixed interest rate of 1.38%.
Exercising this option will result in additional net present value savings of an estimated $368,126. As part of the exchange, reinvesting the funds in the current escrow account will generate an additional $38,044 in interest due to higher yields.
Tax-exempt municipal bonds are debt obligations issued by public entities to fund large-scale public projects like the City’s water and sewer system.
For more information, please see the item report for the Water and Sewer Refunding Revenue Bond, Series 2022 that was presented to the Council as part of the June 14, 2022, agenda package.
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