HomeMy WebLinkAbout04132026 City Council Laydown - ReiersonCity of Seward - Mt Haven Bond Payoff
To: Seward City Council
From: Skip Reierson
RE: Request/Recommendation to Payoff Mt. Haven LTC Construction Bond
SKtio RfkfAein
CC 4/13/26
As of Feb 1st, 2026, the Mt Haven Bond became elegible for a Call Date, which would allow for the
Payoff of the prinpipal balance, prior to 2033, without penalty or interest, thus saving our City just over
$1.4-million.
In addition, once the bond is paid off the $1.4-million Bond Bank Reserve they are holding as
collaterlwill be refunded to the City and can be re -purposed or invested.
Therefore I am respectfully requesti ng Councils consideration for the payoff of the Mt Haven LTC
Bond and retire this significant debt obligation which has generated years of concern regarding our
ability to amass adequate funds from our Healthcare Enterprise to retire.
1/1/16- Mt Haven Bond Fund 19200 Balance (cash on hand) $ 10,769,033
1/1/26- 2017 Refinanced 2008 Mt Haven Bond Balance $ (10,205,000)
Mt Haven Fund Balance after Bond Payoff (excl 2/1/26 $156k interest due) (est) $ 564,033
Benefits for Payoff:
1. It will save our City Interest Expense due 2016-2033 of 3%/ year (est) $ 1,454,000
2. The Bond Bank - Bond Reserve will be refunderd to the City for re -purpose. (est) $ 1,400,000
Note A: Bond Rates for remaining 8-yrs will average 3.1% (variable between 2%- 4%)