By Charlie McKee
On Tuesday evening, Oct. 25, the Town Council approved Resolution No. 2011-35, a Resolution to establish pricing, terms of the Series 2011 Bonds, and sale thereof. The approval allowed the Town of Silver City to sell $5M of municipal bonds, secured by the gross receipts tax, at 3.69% interest on 20-year maturity.
Mark F. Valenzuela of George K. Baum & Co., who managed the issuance of the bonds, presented details of the bond ratings and sale to the Council. Mr. Valenzuela indicated that Silver City's performance in a volatile economy was exceptional, obtaining an excellent A-plus rating from Standard & Poors and a much lower interest rate than other comparable municipal bond issuances in New Mexico.
Another impressive factor in the commitments to buy Silver City's municipal bonds, all of which occurred within an hour and a half period on Tuesday morning, was that 52% of the bonds were purchased by New Mexico institutions: 12% by a local bank; 8% by other New Mexico banks; and 32% by New Mexico bond funds.
A tangential benefit of the bond issuance was the ability of the Town to refinance four existing loans. The loans originally totaled $1.4M at 3.5% interest. Because of the strong outcome from the bond issuance and because the Town had paid off approximately $.5M of the debt in cash, the refinancing interest rate was lowered to 2.2% on $933K from the original 3.5% on $1.4M. This will result in an annual savings of $66K in interest payments for the Town.
Mr. Valenzuela underscored the fact that the outstanding reception of the bond issuance was in large part due to excellent stewardship of the Town of Silver City by the Mayor, Town Council, and Town Manager.
In other business, the Council approved Application/License #A-772114 for a beer and wine liquor license for the Silver Bowling Center, which simply changes the name of the license holder. It also approved Bid #11/12-6 to purchase polyethylene trash bags for sale to residents at City Hall, as requested by the public.
The Council then adjourned the meeting to convene an Executive Session.