A strong financial rating for the City of Bastrop combined with a favorable market has led to the city getting a low borrowing rate for its two largest construction projects ever, City Manager Mike Talbot told the city council during their regular meeting on Tuesday night.
The council chose FTN Financial Capital Markets (Memphis, Tenn.), with a submitted interest rate of 3.8560 percent, to farm out $7.4 million in certificates of obligation to build a new city hall and a separate convention/visitors center.
It will cost the city approximately $3.58 million in interest over 20 years to finance the projects.
“It’s a savings to the taxpayers, and combined with the construction bids for the two projects, we saved this city a lot of money in the future,” City Manager Mike Talbot said.
Regarding the construction bids, Talbot was referring to previously awarded bids for the two projects coming in at about $1 million less than was estimated by city – $7.8 million versus $8.8 million.

Bids varied by .25 percent
In a tightly packed bidding for the certificates of obligation, seven financial firms came in with bids whose total spread was less than one quarter of 1 percent above the winning bid by FTN.
Those bids ranged from the second lowest bid of 3.8788 percent by FirstSouthwest of Austin/Dallas, to the highest bid of 4.0969 percent by Duncan Williams, also of Memphis, Tenn.

‘A+’ financial rating
Dan Wegmiller, a consultant for the city of Bastrop with Specialized Public Finance Inc. of Austin, told the council that Bastrop’s “A+” rating (for general obligation debt) is due to sound financial performance, access to the Austin metropolitan area
He was citing a Public Finance Report for the City of Bastrop from Standard & Poor’s Jan. 14 update on the city’s financial health, for potential investors.
Wegmiller said Standard & Poor’s had also revised the City of Bastrop’s management practices from “standard” to “good,” based on the quality of city’s long-term financial planning.