The city of Miami has closed on a $50 million bond issue needed to refinance a loan that paid its share of the PortMiami tunnel dig, city finance officials announced Thursday.
The bonds were sold within one hour of the selling period, which took place last Thursday.
The city has already used the money to pay off the tunnel loan, which was held by Wells Fargo Bank, City Manager Johnny Martinez said. The payment beat the Jan. 5 deadline.
“We’re very relieved to report that we closed on time,” Martinez said.
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The cost to borrow the money each year is 3.8 percent — a lower interest rate than Martinez had been expecting. The bond buyers were Goldman Sachs, Federated Delphi and Assured Guaranty.
The Omni Community Redevelopment Agency, a quasi-independent city body responsible for funding the city’s share of the tunnel, has promised to make the $4 million in annual debt service payments.
Still, the city is ultimately responsible for paying back the investors. If the payments are not made, the city will be obligated to either raise taxes or cut spending.
Overall, the debt service payments will total $67 million with interest.
Commission Chairman Francis Suarez, who had been skeptical of the bond issue, said it sounded like “a great deal.”
Commission Vice Chairman Marc Sarnoff, who chairs the Omni CRA, also heralded the effort.
Bond issues are a tricky business in Miami.
The U.S. Securities and Exchange Commission is conducting two separate investigations into earlier city bond issues. In one case, the SEC has found that the city misled investors. Civil sanctions are likely forthcoming.
In other business, the commission promoted Todd Hannon from assistant city clerk to city clerk. He replaces Priscilla A. Thompson, who retired in September after 32 years with the city.
Also on Thursday, Mayor Tomás Regalado asked the commission to consider hiring attorney José Quiñón to defend him in a lawsuit filed by Commissioner Michelle Spence-Jones. The suit accuses the mayor and Miami-Dade State Attorney Katherine Fernández Rundle of plotting to destroy Spence-Jones’s political career.
City Attorney Julie O. Bru has said that she cannot represent Regalado or the commission because she was a player in some of the alleged activities outlined in the lawsuit.
Regalado made his case Thursday with his daughter, attorney and Miami-Dade School Board member Raquel Regalado, by his side.
“As the mayor of the city of Miami, acting in my capacity as agent, servant and employee of the city and within the scope of my employment, I ask you to start the process of authorizing legal representation, which we have authorized on many occasions under less serious conditions,” he said.
Spence-Jones called the request “inappropriate.”
“The attorneys that are representing me are doing it on contingency,” she said. “They are doing it on contingency because they believe in this case. My viewpoint is that both sides, both elected officials, should not on rely on the taxpayers to cover the cost.”
Spence-Jones stressed that she was not suing the mayor in his professional capacity.
“I’m suing him in his personal capacity,” she said. “It has nothing to do with the city. This is a personal issue.”
Quiñón quickly fired back, saying Spence-Jones shouldn’t take part in the discussion about whether to hire outside counsel for Regalado.
“The bottom line is, she has a dog in the fight,” he said. “As such, she should not be participating here today.”
The commission decided to have Sarnoff spearhead the hunt for outside counsel to represent the commission on matters relating to the Spence-Jones suit. Once the commission has an outside attorney, the board will take up the issue of an outside attorney for Regalado.