The 24-page proposed ordinance White Hall Mayor Noel Foster asked the city’s aldermen to approve Tuesday evening is as dry as dust, filled with legalese and boilerplate language in 32 sections.
Foster acknowledges the language is dry, but he sees a $120,000 savings to the municipality over the next 15-years in the document.
If approved by the White Hall City Council, the ordinance would refund or pay off 1999 and 2007 series utility bonds totaling $2.54 million and replace them with a 2013 public utility revenue bond series.
The benefits come in lower interest rates on the 2013 series, he said, without extending the payoff of the bonds.
Foster said the simple way to explain the refunding involves comparing a mortgage on a house made in 2005. Today’s interest rates are much lower and a homeowner could see their monthly mortgage reduced by paying off the original mortgage and obtaining a new mortgage with the reduced payoff period.
Much of the language in the ordinance was written by a bond attorney, a profession noted for long documents that can put someone to sleep reading the verbiage.
One Arkansas bond attorney once described his profession as explaining how the watch was made when asked the time.
It is long, Foster explained, to qualify for the municipal bond tax exempt status. That tax exempt status means a lower interest rate.
It is necessary to comply with applicable securities laws, to adopt a “Post-Issuance Compliance Policy Manual” and to enter into a continuing disclosure agreement between the municipality and Simmons First Trust Co. as dissemination agent, Foster noted.
The aldermen should have been warned to bring a pillow for a quick nap while the proposed ordinance was read.