FOR IMMEDIATE RELEASE September 16, 2010
Bond Refinancing Saves Town of Cary Over $700K
CARY, NC – Thanks to current market conditions and a competitive bid process, the Town of Cary has successfully refinanced a portion of the 2003 voter-approved Public Improvement general obligation bonds, saving the Town and its taxpayers $728,000 in debt service, $217,000 of which will be realized in the current fiscal year. The action has a present value savings of almost $645,000 or 4.3 percent.
This transaction is the second bond refinancing opportunity the Town has taken advantage of this year. In June, Cary refinanced a portion of the 1999 voter-approved Cary Community general obligation bonds as well as a portion of the 2002 Certificates of Participation valued at $25.4 million, saving Cary taxpayers $1.5 million, with $795,000 of that also being realized this fiscal year. To take advantage of a refinancing opportunity, staff constantly monitors the market to ensure debt savings of at least three per cent.
“The Cary Town Council is always challenging staff to remain financially smart, and we are constantly monitoring the market for opportunities to save our taxpayers money,” said Karen Mills, Town of Cary Finance Director. “In this situation, bids were competitive, resulting in a great rate and emphasizing the importance of the Town’s AAA bond rating and sound financial practices.” Mills added that while only five to seven bids were expected, 12 bids were received and Citigroup presented the best refinancing option.
In May, Moody’s Financial Service, one of the three major bond rating agencies in the U.S., upgraded the Town of Cary revenue bonds to a Triple A rating, the highest possible. As a result, Cary now boasts the AAA rating from all three agencies—Moody’s, Fitch Ratings and Standard & Poor’s—on all revenue bonds. Cary has been rated Triple A by all three rating agencies for its general obligation bonds since 2001. In North Carolina, Cary and Charlotte are the only municipalities to share the prestigious ranking of Tripe A for both general obligation and revenue bonds. Cary’s AAA ratings help its taxpayers save hundreds of thousands of dollars in interest over the years.
To learn more, visit Municipal Bond Sales and the Finance Department at www.townofcary.org or call (919) 469-4380.
PRIMARY CONTACTS: Karen Mills, Finance Director, (919) 469-4110 Carrie Roman, Public Information Specialist, (919) 481-5091 Susan Moran, Public Information Director, (919) 460-4951
Friday, September 17, 2010
Sunday, September 5, 2010
Week(s) in Review: 8/22/10 - 9/3/10
To say the last couple of weeks have been busy would be an understatement! But I’m not complaining - it sure beats the heck out of the alternative.
Council held a worksession last Thursday prior to our council meeting to discuss recommended board and commission appointments. All appointments were unanimously approved, however I did express dissatisfaction regarding appointments to the Environmental Advisory Board – NOT because of the appointments themselves, but because the council wasn’t given time to review them as the liaison submitted them less than 24 hours before the worksession. Every other council member had their recommended slates in a week prior, giving council members ample time to review and voice any concerns they may or may not have. Believe it or not, the same thing happened last year also.
The main discussion item at our council meeting last week was the consideration of a plan that would resume issuing building permits in the Peninsula at Amberly development. The town had placed a hold on the issuance of building permits as the developer has not completed the required infrastructure improvements, and fails to respond to the town’s requests to do so.
Realizing that developers can and sometimes do go out of business, the town requires that they (developers) submit financial guarantees to the town to ensure these improvements are completed. This developer did submit a financial guarantee in the form of a letter of credit from a bank. So no problem right?
Wrong. The town was notified through FDIC that this bank has been placed in receivership and closed.
A number of builders – local custom home builders I might add – and private citizens purchased lots from the developer and have been trying to get building permits for months. But the town’s land development ordinance will not allow issuance of building permits without financial guarantee for the required infrastructure improvements.
The town has worked to create a temporary ordinance amendment to address this unprecedented issue. This temporary ordinance amendment would charge lot owners a per lot fee to cover their cost of the infrastructure improvements. It would also allow them to pay half of the fee when the building permit is issued, and the remaining half before issuance of certificate of occupancy to help with cash-flow concerns.
While all of council supported this proposal, the majority of our discussion centered on at what amount to set the fee level. The council ultimately decided by a vote of 6-1 to set the fee amounts based on the original letters of credit since this is the amount the town would have received from the bank had they not gone under. The town will also continue to aggressively pursue collection from the developer to include legal action.
I feel sorry for the builders and lot owners who have been put in the position of having to bear someone else’s financial responsibility. They already paid their “fee” when they purchased the lots from the developer as we all know that that amount was factored into the lot price. This isn’t the builder’s fault. It’s not the town’s fault. It’s not the citizen’s fault. Yet someone has to cover the costs of the infrastructure or else it falls on the backs of Cary taxpayers – and that’s not acceptable.
It is my hope that through legal action we can get the developer to comply and/or that maybe another developer will purchase the project and complete these improvements; allowing us to refund those fees back to the builders and lot owners. In the meantime, builders can start building again and those folks who were trying to build their dream home will realize that dream sooner than later.
I had the honor of attending the annual neighborhood picnic at Meadowmont this past week. This was a blast as over 100 people gathered for food, fellowship and fun. I spoke to those in attendance about a number of initiatives in the old Cary area and answered questions from area residents.
I also had the pleasure of attending a baby shower for soon to be Grandma Sue Rowland (our Town Clerk). Sue is an amazing woman who works very hard to keep Cary organized and legal. She dots every i and crosses every t. For those of you who may not know what the town clerk does, they are the custodian of all permanent town records, responsible for noticing and recording all of our meetings, manages our boards and commissions, and provides support services for the council and staff… and a bazillion other things that aren’t in their job description. ;-) I have learned a great deal working with Sue and I will forever be in her debt. Congratulations Sue!
Council held a special meeting on Thursday to consider actions needed to refinance some of the town’s existing debt obligation. We approved refinancing about $15 Million in general debt obligation saving Cary taxpayers about $875,000. Great meeting! Council also held a brief closed session afterwards to discuss a legal matter.
That’s all for now – as always, thanks for reading!
Council held a worksession last Thursday prior to our council meeting to discuss recommended board and commission appointments. All appointments were unanimously approved, however I did express dissatisfaction regarding appointments to the Environmental Advisory Board – NOT because of the appointments themselves, but because the council wasn’t given time to review them as the liaison submitted them less than 24 hours before the worksession. Every other council member had their recommended slates in a week prior, giving council members ample time to review and voice any concerns they may or may not have. Believe it or not, the same thing happened last year also.
The main discussion item at our council meeting last week was the consideration of a plan that would resume issuing building permits in the Peninsula at Amberly development. The town had placed a hold on the issuance of building permits as the developer has not completed the required infrastructure improvements, and fails to respond to the town’s requests to do so.
Realizing that developers can and sometimes do go out of business, the town requires that they (developers) submit financial guarantees to the town to ensure these improvements are completed. This developer did submit a financial guarantee in the form of a letter of credit from a bank. So no problem right?
Wrong. The town was notified through FDIC that this bank has been placed in receivership and closed.
A number of builders – local custom home builders I might add – and private citizens purchased lots from the developer and have been trying to get building permits for months. But the town’s land development ordinance will not allow issuance of building permits without financial guarantee for the required infrastructure improvements.
The town has worked to create a temporary ordinance amendment to address this unprecedented issue. This temporary ordinance amendment would charge lot owners a per lot fee to cover their cost of the infrastructure improvements. It would also allow them to pay half of the fee when the building permit is issued, and the remaining half before issuance of certificate of occupancy to help with cash-flow concerns.
While all of council supported this proposal, the majority of our discussion centered on at what amount to set the fee level. The council ultimately decided by a vote of 6-1 to set the fee amounts based on the original letters of credit since this is the amount the town would have received from the bank had they not gone under. The town will also continue to aggressively pursue collection from the developer to include legal action.
I feel sorry for the builders and lot owners who have been put in the position of having to bear someone else’s financial responsibility. They already paid their “fee” when they purchased the lots from the developer as we all know that that amount was factored into the lot price. This isn’t the builder’s fault. It’s not the town’s fault. It’s not the citizen’s fault. Yet someone has to cover the costs of the infrastructure or else it falls on the backs of Cary taxpayers – and that’s not acceptable.
It is my hope that through legal action we can get the developer to comply and/or that maybe another developer will purchase the project and complete these improvements; allowing us to refund those fees back to the builders and lot owners. In the meantime, builders can start building again and those folks who were trying to build their dream home will realize that dream sooner than later.
I had the honor of attending the annual neighborhood picnic at Meadowmont this past week. This was a blast as over 100 people gathered for food, fellowship and fun. I spoke to those in attendance about a number of initiatives in the old Cary area and answered questions from area residents.
I also had the pleasure of attending a baby shower for soon to be Grandma Sue Rowland (our Town Clerk). Sue is an amazing woman who works very hard to keep Cary organized and legal. She dots every i and crosses every t. For those of you who may not know what the town clerk does, they are the custodian of all permanent town records, responsible for noticing and recording all of our meetings, manages our boards and commissions, and provides support services for the council and staff… and a bazillion other things that aren’t in their job description. ;-) I have learned a great deal working with Sue and I will forever be in her debt. Congratulations Sue!
Council held a special meeting on Thursday to consider actions needed to refinance some of the town’s existing debt obligation. We approved refinancing about $15 Million in general debt obligation saving Cary taxpayers about $875,000. Great meeting! Council also held a brief closed session afterwards to discuss a legal matter.
That’s all for now – as always, thanks for reading!
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