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Council discusses of a $25.8 million bond issuance

LYNNWOOD, Wash, December 7, 2021 – At Monday’s City Council Work Session the issuance of the city’s 2022 Bond Ordinance was discussed. Lynnwood’s Finance Director Michelle Meyer gave a brief presentation on the topic. 

“This agenda item is to just review the bond authorizing ordinance itself, and then this will be brought back to [council] next week for approval,” she began.

Speaking to when the bids came in for the new Community Justice Center, Director Meyer notes that “they were about $5 million over just because of the supply chain costs—and just the problems we were having everywhere with all projects related to the pandemic.” 

Meyer then recounted that “the decision was made that we could go ahead and approve the contract with the understanding that we could approve another $5 million next year,” after the city refunds an issuance from 2012.

The 2022 Bond Ordinance packet included in this Work Session’s agenda was prepared by the city’s Bond council and sets the parameters for the issuance. Meyer reminded the council that the ordinance doesn’t need to be approved this year but is being presented now so that council can visualize and evaluate the additional $5 million mentioned earlier.

“So that we can show the full authority for that Community Justice project,” Meyer said.

Presenting a slide of the remaining debt capacity, Meyer pointed to the 2012 issuance of 19,520,000 for the city’s Recreation Center and this year’s $49,315,000 bond issued on June 24 for the Community Justice Center, with the final maturity date marked for December of 2050.

Meyer noted that the City’s debt capacity is based on its assessed valuation. And as Lynnwood’s valuation is projected to go up, Meyer stated that the city has about $33 million remaining in non-voted bond capacity, which will increase to about $35 million in 2022. 

“Even if we add the additional $5 million for the Community Justice Center, that still leaves us with around $30 million of remaining non-voter approved capacity,” she said.

This non-voter general obligation debt capacity combined with “Total General Obligation Debt Capacity for General Purposes” adds up to around $112 million, which is the City’s total remaining debt capacity.

Meyer also shared estimations for next year’s Net Present Value (NPV). “There’s not a lot of speculation that interest rates are going to increase very much within the next six months,” she said before pointing to the estimated NPV savings of around $2.4 million, which is an annual savings of about $180,000 in the general funds.

According to Director Meyer, the Council’s current plan is to use those annual savings to cover the additional $5 million needed for the Community Justice Center. 

After the presentation, Council President George Hurst clarified with Meyer that none of the bonds presented are related to the Community Recover Center (RCR) — an additional section of the CJC that will provide behavioral health services

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