On March 6, 2023 the Galesburg City Council approved the issuance of $4,920,000 in bond funding to support the future development of a community center. The City was assisted by Speer Financial with the bond issuance and received a very favorable interest rate.
The process to secure bond funding was initiated by the Galesburg City Council at the January 17, 2023 City Council meeting, when the council passed a resolution directing city administration to move forward with the process to secure bond funding. Staff subsequently established the city’s credit rating and began the process for the sale of bonds. The culmination of this work resulted in a very positive bond sale, which received 29 bids from five bidders. Speer Financial recommended acceptance of the most favorable bid of a bond issuance of $4,920,000 at a true interest rate of 3.3211%.
“Given the current economic climate, this is an exceptional interest rate which was secured for bond financing,” said City Manager Gerald Smith. “The competitive rates received illustrate that Galesburg’s outlook and positive financial position were attractive for such an investment in our community.”
The bond purchase price, which includes a premium, of $5,373,493.07 will come at a total interest cost of $1,542,583.33. The debt is structured as a 10-year issuance, with interest and principal payments commencing in 2024 and concluding in 2032. The home rule sales tax increase of .25% (or 25 cents for every $100 dollars spent), which was approved at the December 19, 2022 City Council meeting will be utilized to fund the bond principal and interest payments.
The bonds were issued with the purpose of financing the costs of acquisition, construction or renovation of an existing facility for the purpose of a community center. The Galesburg City Council has been making strides towards the development of a community center, and obtaining the bond funding at such a favorable rate to lock in a funding mechanism for the project, achieves one of the many steps necessary to move the project from a concept to reality.
***Courtesy of the City of Galesburg***