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The Burnet City Hall will be in the old Bealls building, on E. Polk Street. File photo
Burnet city council members approved issuing another $6 million in city debt on Tuesday, July 27, with about $5 million of that going to development of the new city hall, the old Bealls building on East Polk Street, and the remaining $1 million for the municipal airport.
City financial advisor Jennifer Ritter, of the Austin firm of Specialized Public Finance Inc., told the council interest rates for municipal bonds are especially good at the moment.
Ritter said seven financial firms bid for the bonds with the lowest coming in at 1.67 percent, rounded up to 1.68 percent.
“That’s not a typo,” Ritter said.
“When we get below 3 percent it’s good, certainly when we get below 2 percent, that’s great,” she said.
The bond market “for probably a couple of days in the last 10 years (has been) cheaper, certainly not a month or a week,” Ritter said.
When cities borrow money by issuing debt certificates, they must pay interest just as a family pays interest on a bank loan for something like a new car. The lower the interest rate, the better for the city.
Burnet’s Standard & Poor’s bond rating is AA- (read as “double-A minus”), Ritter said. She said usually a rating below AA+ means lenders will require insurance that payments will be made, but that request wasn’t made of the city.
The council also approved budget amendments totaling $3,586,729. That money will be used for several projects, including payment of a loan to buy the Bealls building and pay for the new fire station.
Most of the items already had been approved by the council. Except for the new city hall financing, all will be covered by existing funds, according to the background sheet by City Manager David Vaughn.
