Residents in the Mossdale area of Lathrop could be getting a slight break on their CFD assessments if the City of Lathrop is successful in refinancing the current bonds.

Originally issued in 2013, the current bonds have $12.9 million in principal remaining and are slated to be paid off in 2035 at an annual interest rate of 5.57 percent. Because of favorable market conditions the city sought the assistance of KNN Public Finance – a consulting firm that has worked with the city in the past on a number of bond issuances – to structure a refinancing deal that could save Mossdale homeowners between $62 to $83 annually.

The break comes as a result of the city potentially saving between $1.1 and $1.5 million after issuance costs at the current refinancing rates.

The cost of hiring the consultant that will assist the city in securing the more favorable finance rates will range from $61,500 to $86,500 depending on steps needed to secure the rates. Those fees will be dependent upon successful pricing and closing of the necessary transactions. All the fees for executing those transactions will be included in the issuance fund that comes as a result of the debt refinancing.

The three options that were provided to the council last week for their consideration were part of a wider effort to secure the best possible savings – preparing contingencies in case of the unplanned deterioration of market conditions.

Once the formal method for restructuring the existing debt is decided, the matter will be brought back before the Lathrop City Council for formal acceptance a vote for approval to begin the process.

Additional information about the proposal can be found at the City of Lathrop’s website by visiting www.ci.lathrop.ca.us

http://www.ci.lathrop.ca.us/

To contact Bulletin reporter Jason Campbell email jcampbell@mantecabulletin.com or call 209.249.3544.