Certificates of participation, as the bonds are called, totaled $28,425,000 and were used to acquire and construct the golf course. They were also used to refinance the city's outstanding 1991 certificates that were originally used for the construction of the Pleasanton Senior Center.
With $20,650,000 in certificates remaining outstanding, Finance Director Emily Wagner told the council that by paying the bonds off in advance of their scheduled maturity on Oct. 1, 2032, the city will save approximately $10.7 million in interest costs.
Wagner said she will be borrowing funds from several reserves in order to accomplish the early payoff on June 15, when the certificates can be called. Rather than making principal and interest payments annually of $1.6 million , those payments can now be made to repaying the reserves, repaying the full amount in 13 years instead of the 20 years that would be required for the certificates.
The drawdown of reserves will come from the the golf course reserve general fund, $2 million; the golf course reserve golf course fund, $1.2 million; the temporary recession reserve fund, $11.2 million, and internal service funds, $6.5 million.
Current interest rates on the outstanding certificates are 4.6%, Wagner said, whereas the city is currently earning just under 1% on the reinvestment of city funds that total $204 million.