GENEVA – In a split vote Monday, aldermen approved an ordinance to issue $2 million to refinance an electrical system alternate bond issue from 2007.
The refinancing will save the city $89,477, said Raphaliata McKenzie of Speer Financial, the city’s bond advisor. It exceeds the target percentage savings of 3 percent and the minimum savings of $75,000.
The savings over the remaining debt is 4.607 percent, she said. It does not add debt, nor extend the bond beyond its payoff in 2021.
The negotiated bond sale cost of the remaining General Obligation Alternate Revenue Bonds, Series 2007 was $1.9 million to Robert W. Baird and Company Inc., of Naperville.
Speer’s fee is $42,000, McKenzie said, after the city’s savings.
The original loan was for $2.45 million, according to the bond ordinance.
“We had a great sale,” McKenzie said. “It retires in less than seven years [with] almost $90,000 in savings.”
Still, the council voted 3-11 in favor, including a yes vote from Mayor Kevin Burns, after discussion about competitively bidding the bond sale versus negotiating the sale.
Aldermen voting “no” were 2nd Ward Alderman Don Cummings, 3rd Ward Aldermen Mary Seno and Dean Kilburg.
“We are making a $2 million decision on a bond issue,” Cummings said. “If we were making a $2 million decision on anything else – a truck, a building, road paving, curbs – we would go out for competitive bids. .... Simply because it’s bonds, I don’t think we get to skate on our duty and go with a negotiated issue.”
McKenzie brought comparisons of negotiated and competitive bids in the past month, showing the savings were comparable.
But Cummings did not agree.
“I’m not saying that we got bad numbers from Baird,” Cummings said. “But I am saying we owe it to the taxpayers to go with competitively bid issue, not negotiated ones.”
City Administrator Mary McKittrick said the negotiated sale was a “for sure savings.”
“Rather than taking a chance, going through the [bid] process, getting perhaps rejected,” McKittrick said.