The South Miami city commission on Jan. 20 authorized City Manager Steven Alexander to execute an agreement with Squire, Sanders & Dempsey, LLP, to represent the city as bond counsel for its tax-exempt loan refinancing.
“The idea is that if we can make enough savings on refinancing on the loans then we will do that,” Alexander said. “If we are going to refinance then everything has to come back before the commission, it's pretty simple. Most governments do this from time to time. It has been awhile for us, so it was time.”
On Sept. 24, 2012, the commission approved an ordinance to authorize the issuance of its capital improvement revenue refunding in an amount not to exceed $5.8 million to refinance the city’s debt. That refinancing would have provided a savings of more than $640,000 based on a 20-year interest rate, but the loan fell through when BB&T decided not to follow through with it due to the Metro South lawsuit.
“[BB&T] were the ones that did my refinancing in 2012, which fell through,” said Alfredo Riverol, South Miami’s chief financial officer. “We were literally at the closing table with the best loan in the world … then get served with a lawsuit right before and the bank didn't feel comfortable going forward at the closing having a $26 million lawsuit on our hands.”
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Riverol will work with a financial advisor during the process. The $5.8 million amount could change this year due to interest.
“The financing may deviate a little bit,” Riverol said. “There is no real set amount until you get to closing. You have to take into account how much interest is due at the date of closing. It's estimated to be about 5.8 million. Just yesterday I got my financial advisor. It could be 5.8 but it all depends on how my rates come back and the terms that are provided to me when we solicit.”
Riverol said the city puts out a proposal where banks can submit their terms for issuing a loan to the city.
“The city was looking at refinancing in 2012 and the Metro South thing happened so they stopped,” Alexander said. “We have several bonds and financings out. Every now and the you have to look at the refinancing and see if it makes sense. We need to go out now and see if it makes sense for the city.”
Squire, Sanders & Dempsey LLP’s legal services will be a fixed fee of $20,000.
The commission also authorized Alexander to negotiate a contract with R.E. Chisholm Architects to complete architectural and engineering drawings for a concession stand at Palmer Park. Alexander will also negotiate and execute an amendment to the Miami-Dade County Information Technology Department (ITO) contract improving the city’s IP scheme and changing the city’s public IP addresses to private IP addresses.