Sarasota, FL - The City of Sarasota, it is believed, is the first issuer in Florida to sell Build America Bonds, which are partially subsidized by the U.S. Treasury through the American Recovery and Reinvestment Act of 2009 which was signed into law by President Obama on February 17, 2009.
The City of Sarasota issued $21 million in bonds to finance land acquisition and construction for parking, parks and recreation, including the Palm Avenue parking garage, Payne Park land extension, and the new Robert L. Taylor Community Complex. By participating in the Build America Bonds program, the City will save approximately $1 million in interest payments over the bonds' 15-year term, according to Chris Lyons, the City's Finance Director. “The annual savings will surely be put to good use in these challenging times,” Lyons said.
Under the Build America Bond program, the federal government is expected to directly subsidize 35 percent of the interest costs, said Duane Draper with Bryant Miller Olive, the City's Bond Counsel. With that subsidy, the bonds' effective interest rate is 3.78 percent based on current market conditions, well below the 4.10 percent estimated cost of a tax-exempt bond issue, according to Julie Santamaria with RBC Capital Markets, the City's Financial Advisor.
Following a Request For Proposal process, the City selected Bank of America to purchase the privately placed bonds based upon its providing a proposal with the greatest economic benefit to the City.
For more information, contact Chris Lyons, City of Sarasota Finance Director at christopher.lyons@sarasotagov.com or 941-954-4185.
For more information, please contact:
Jan
Thornburg, Public Information Officer (941) 954-2613
jan.thornburg@sarasotagov.com
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