City Committee Approves Website Support, Reviews Debt Refunding Opportunities

Introduction

At the October 6, 2021 Government Operations Committee meeting, officials approved a new technical support agreement for city websites and examined detailed strategies for 2021 debt refunding. The discussions demonstrated a commitment to technological modernization and financial efficiency as the city seeks to save millions through strategic debt management.

Approval of Website Technical Support Agreement

The committee voted to approve a one-year, $42,000 agreement with Four Kitchens LLC for website technical support.

Key Details:

• Four Kitchens, formerly known as Abomatic, will continue to maintain and update the city’s three core websites:

  • The main city website

  • The code book site

  • The employee intranet

• The agreement includes security updates, technical development, and support services.

• A website redesign and platform migration are planned, with an RFP expected by the end of the fiscal year.

• The approval was unanimous, signaling strong support for ongoing investments in digital infrastructure.

Presentation on 2021 Debt Refunding Opportunities

The majority of the meeting focused on a presentation by Delena Welcomer, Senior Vice President of R.W. Baird, outlining debt refunding strategies.

Key Recommendations:

• Maintain a 5% Net Present Value (NPV) savings threshold, exceeding the Government Finance Officers Association’s (GFOA) recommended 3-5%.

• Explore current refunding for debt callable within 90 days and taxable advanced refunding for longer-term opportunities.

Current Refunding Opportunities

Three General Obligation (GEO) bonds from 2011 (Series a, c, d) are eligible for current refunding:

• Callable Par: $4.8 million

• Potential Savings: $504,000 (10.48% NPV)

• Primary Beneficiary: General Fund

Advanced Refunding Considerations

Following the 2017 Tax Reform Bill, tax-exempt advanced refunding is no longer available, but taxable refinancing is increasingly attractive.

Highlighted Bonds:

• Four bond series from 2012 and 2013, totaling $30.6 million in callable par, with potential savings of $3.8 million (12.6% NPV).

• The 2013A bonds stand out with projected savings of $3.3 million (14.7% NPV).

• Market projections show that rising interest rates could make immediate taxable refunding favorable.

Committee Discussions and Clarifications

Committee members engaged in an in-depth discussion of:

• The impact of refinancing on future call dates (expected in 2028–2029).

• Differences between taxable and tax-exempt market rates (approximately 75 basis points).

• Issuance costs of 1.5% of the outstanding balance, rolled into new debt calculations.

Formal recommendations on which bonds to prioritize will be presented in a future meeting.

Meeting Highlights

• Duration: 26 minutes

• Decisions Made:

  • Approved the Four Kitchens website support agreement.

• Action Items:

  • City staff to bring forward formal refunding recommendations.

Conclusion

This meeting emphasized St. Charles’ dual commitment to modernizing its digital infrastructure and maximizing financial savings. The approval of a website support contract ensures smooth online operations, while debt refunding strategies could save the city millions in the coming years.