In response to the upward momentum of the city's economy and a presentation by city representatives, Magnolia's 2013 series of general obligation bonds has received an A+ credit rating from the Standard and Poor's (S&P) index.
S&P's rating summary, published Dec. 30, 2013, cited Magnolia's "access to the Houston metropolitan statistical area's (MSA) deep and diverse economy" and its "strong budgetary performance due to consistent surpluses over the past few years" as major contributors to the rating.
Having garnered such a positive appraisal from S&P, a company that analyzes and rates the creditworthiness of both private and public agencies, has served to greatly increase investor confidence in Magnolia bonds. On account of that fact, the city has been able to refinance its outstanding debt to great effect.
David Holland, senior managing director at U.S. Capital Advisors LLC, and Jim Gilley, the company’s managing director of public finance, presented a report on the details of the refinancing as well as its projected impact on the city during the Feb. 11 meeting of the Magnolia city council.
"Current reception in the municipal market is much better for (general obligation) bonds than revenue bonds," commented Holland. "Therefore, to maximize savings to Magnolia on their outstanding revenue debt, US Capital Advisors lead banker Jim Gilley, City Administrator Paul Mendes, Mayor Todd Kana and the city council implemented a strategy to refund the revenue bonds with (general obligation) bonds."
In accordance with this new strategy, Magnolia entered the municipal bond market Jan. 15 in order to refinance the city's outstanding bond debt. This endeavor was a great success, slashing the borrowing rate from 5.05 percent to 3.017 percent. This is expected to save the city and its taxpayers more than $1.6 million.
The city council also discussed a variety of other matters at last week's meeting, such as arrangements for the upcoming general election. The most contentious of these discussions centered around the adoption of an amended personnel policy.
Council member Anne Sundquist voiced concerns that the policy had not been adequately reviewed by the human resources department. However, upon being assured by Paul Mendes that the policy had, in fact, received the go-ahead from the HR department head, she rescinded her concerns. The motion for adoption passed unanimously.
Upon consideration of a request from the Greater Magnolia Chamber of Commerce for police protection at the 2014 Christmas Parade, Mayor Kana expressed an unwillingness to provide services of significant monetary value without assurances that the parade would bring money into the city. He proposed that city officials broker an exchange of services with the chamber. Council members unanimously assented to this proposal.
Chamber officials have thus far declined to comment on the matter.
Mayor Kana was also presented the Boy Scouts of America's Orion District's 2013 Community Leadership Award by Orion District Chairman John Dutch. Several scouts arrived in uniform to witness the presentation.
Miss Magnolia Lyric Matthews made her first official public appearance since her crowning in December. Matthews said that she was "very excited" to be making the appearance. After posing briefly with Mayor Kana for photos, she left with two chaperones to attend a second event.