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|Refinancing to fuel economic district's development|
The city of Monroe will be in a position to complete several extra projects in the Garrett Road Economic District without increasing costs to taxpayers.
That's the case because the economic district, commonly known as the I-20 economic development district, recently sold bonds to refinance its bonded indebtedness. Charlie Sides, an underwriter with Stephens Inc. in Baton Rouge, and Bill Boles Jr. of the Boles Law Firm in Monroe, handled the bond sale for the economic district.
The move has produced an additional $11.9 million for infrastructure improvements in the economic district, according to Nnamdi Thompson, a financial consultant for the city.
Among the possible projects the additional money could be used for include a turn lane at the Garrett Road/Frontage Road intersection near Lowe's and improved access to undeveloped land along the Interstate 20 corridor near Garrett Road.
Thompson said the city was able to take advantage of the Garrett Road Economic District's improved bond rating to secure more favorable interest rates on bonds, which were originally sold in 2003 and 2005.
In the meantime, state Rep. Kay Katz was successful in convincing the Legislature to extend the economic district's favorable taxing authority concerning sales taxes collected in the economic district until 2025. Katz's actions, along with Sen. Bob Kostelka's help, gave the economic district more time to repay any bonded indebtedness.
That also gave city officials an opportunity to refinance more than $26 million in debt, which the economic district owed, saving interest and producing the additional capital to fund projects in the economic district.
"This very favorable project for the economic district and the city in general could not have been possible had it not been for Rep. Katz's and Sen. Kostelka's hard work," Boles said. "They are the ones—especially Rep. Katz—who made it possible for the city and the economic district to take advantage of an opportunity to continue its work in developing the city's infrastructure at no cost to the taxpayers."
When the city reissued, or resold, the economic district's bonds, officials secured bond insurance to guarantee the new bonds. According to Sides, that move helped lower interest rates on the bonds that were resold.
Sides said the various factors involved in refinancing the economic district's debt combined to produce the new money without additional costs to taxpayers.
"It's the same revenues they were receiving beforehand," Sides said. "But due to these three or four factors, we were able to get an additional $11.9 million."
Sides said the economic district's improved bond rating, as well as utilizing bond insurance in the refinancing, meant the district's bonds were issued at an interest rate of 4.95 percent--more than 1 percent less than the original bonds sold for some three to five years ago.
Standard and Poor, a national bond rating agency, gave the Garrett Road district an A-minus bond rating, or an excellent bond rating.
Sides said by using bond insurance, the city was essentially able to sell the bonds at the lowest possible interest rates.
"Due to favorable interest rates that we received by going out and getting insurance on the bonds, we essentially got AAA interest rates," Sides said, referring to the best bond rating Standard and Poor issues.
The interest rate savings and longer term for the bonds will mean more projects can be completed for the same amount of tax dollars, Sides said.
"All of that took place without raising the city's debt service payment," Sides said. "It's a win-win situation for the city and the taxpayers."