Boyne City received bids for financing its upcoming city facilities project on Tuesday March 8.
The $7,000,000 worth of bonds were sold by Boyne City for the project.
Prior to the sale, the city had received an A+ rating from Standard and Poors.
Seven bids were received from financial organizations all across the country.
The low bid came from Stifel, Nicolaus & Co., Inc. of Birmingham, Alabama with a true interest cost of 2.745131% over the 20 year life of the bonds.
The actual interest rate is much less that the estimated 4.5% that was used when the issue was presented to and approved by the Boyne City voters in May of 2015.
Based on calculations from Boyne City’s financial consultants, the lower interest rate will result in debt payment millage rates estimated to be 1.32 mills in the first year and 2.18 in the second year compared to the 2.69 mills contained on the ballot.
Future debt millage rates are expected to remain in the 2.18 mill range but could go up or down depending on Boyne City’s future taxable value levels.
“We hoped that borrowing costs would remain low for this project, and they have.” said Boyne City Manager Michael Cain. “If you have to borrow money, this is the time to do it. These low interest rates will help keep the project costs as low as possible, saving our taxpayers money.”
The construction contract for the city facilities project is scheduled to be presented to the Boyne City Commission for consideration at its 7 p.m. Tuesday March 15 meeting.
Staff recommends the bid be presented to the low bidder, Hallmark Construction of Traverse City.
Hallmark was also the low bidder on Boyne City’s new Department of Public Works facilities which was completed in December 2015.