|
|
Hannibal Courier - Post - Hannibal, MO
  • Finance director: Sales tax jump didn’t impact bond refinancing

  • As expected, the Hannibal City Council took some of the steps necessary to refinance 2008 bonds during a special meeting Tuesday afternoon at City Hall.
    • email print
  • As expected, the Hannibal City Council took some of the steps necessary to refinance 2008 bonds during a special meeting Tuesday afternoon at City Hall.
    The Council gave the first of two required readings to the actual refinancing proposal. An agreement with Stifel, Nicolaus as the private placement agent was also OK’d.
    The city considered a refinancing opportunity in January, but decided to pass because sales tax revenue was lagging behind estimates so badly. According to Doug Warren, city finance director, the decision to refinance now is not a reflection on the city’s sales tax income.
    “It’s unrelated,” he said.
    Warren explained that not having to secure a Moody’s bond rating made the latest refinancing proposal appealing. There were also a handful of benefits that has the city ready to refinance.
    “It turns out we’ll end this thing (bond payment schedule) a year-and-a-half quicker with the same payment, a lower interest rate and we’ll save $160,000. We couldn’t resist that,” said Warren.
    While it didn’t play a factor in the city’s decision to refinance its 2008 bonds, that doesn’t mean Hannibal’s financial picture isn’t brightening. City Manager Jeff LaGarce recently reported to the Northeast Missouri Economic Development Council that the city received in mid July its best sales tax report in two years. According to Warren, the figure was 8.7 percent over what was budgeted.
    “That’s a very good number,” he said.
    “We’re up already,” said LaGarce. “A year ago we were down 12.5 percent.”
    According to the city manager, the first two quarters of the last fiscal year were the worst the city had seen in a decade. At the conclusion of June, when the fiscal year ended, Hannibal was down almost $600,000 in sales tax revenue, according to Warren. The city’s finance director is at a loss to explain the dramatic turnaround.
    “I wish I knew,” he said.
    While happy about the recent positive sales tax report, Warren is not ready to proclaim all is well in river city.
    “Until I see three months in a row with good sales tax I’m not going to buy into it,” he said. “I’m a little less optimistic than Jeff. But that’s the nature of my job.”
    One thing that should help is the closing of a sales tax loophole by the Missouri Legislature on vehicles purchased out of state by Missourians. The measure was signed by Gov. Jay Nixon earlier this month. Warren estimates that alone cost the city $180,000 a year ago.
    Page 2 of 2 - Among the projects the 2008 bonds funded was the Street Department facility on Warren Barrett Drive ($1.6 million) and various street upgrades ($2.04 million).
      • calendar