The members of the West Haymarket Joint Public Agency (JPA) today announced a plan to save taxpayer dollars through early payment of the bonds issued for the Pinnacle Bank Arena. The plan is part of a proposed financial model and policy that addresses the financial future of the JPA. The three-member board - Mayor Chris Beutler, NU Regent Tim Clare and City Council member Doug Emery - issued its sixth and final series of bonds last week.
"The JPA has always been careful and conservative in its financial planning," said Beutler, JPA Chair. "As a result, the arena is not just financially secure - we now have a plan to pay off the arena bonds early. That means our 'on time and on budget' arena will cost us even less than we originally planned."
Beutler said the City's excellent credit rating and a period of historically low interest rates have resulted in saving taxpayers millions of dollars on the arena bond issues. The $353.5 million in bonds have a blended interest rate of 3.786 percent. Compared to the projected interest rate of 5 percent, the interest savings until 2021 is $4.3 million annually, and the approximate savings over the life of the bonds is $100 million.
City Finance Director Steve Hubka and former Finance Director Don Herz worked with the JPA to develop the proposed financial model and policy. The Mayor said it incorporates the JPA's desire to identify a portion of the JPA's cash balance to be used for early payment of the bond debt once the bonds become eligible for early retirement. The early payment, he said, will result in additional savings on interest.
This proposed financial model and policy will be on the JPA's agenda for the December 19 meeting for public comment and adoption. The meeting begins at 3 p.m. and will be held in the City Council Chambers, County-City Building, 555 S. 10th Street.