Salem, Ore. — In a competitive bid, on February 9, 2023, the City of Salem received 13 bids for its tax-exempt series and nine bids for the taxable series. The all-in true interest cost for the combined sale was 3.63%. Prior to the bond sale, the City and their financial advisor had anticipated a more conservative 4.27% interest cost. This lower rate means the City will have long-term savings for taxpayers through the life of the bond. Like a house sale, the bond sale closes two to four weeks after agreement to terms is reached. The City’s bond sale closes February 23, 2023. At closing, the City is also expecting approximately $7 million in premium, or additional funding. These funds will be available to support completion of the bond projects as costs may continue to increase over the course of the next ten years.
“We are so pleased that this first of three bond sales was so well received by the market,” said Mayor Chris Hoy. “With this first bond sale, we’ve ordered all 16 fire trucks and other essential life-saving emergency equipment used in the Fire Department’s response. This is a great sign and bodes well in the long-term for our program of voter-approved community-wide investment.”
The City plans to issue two more bond sales within the next ten years to support Salem’s safety and livability measure, passed by voters in November 2022. In addition to fire trucks and equipment, the bond includes investments in Salem’s streets, sidewalks, parks, two new fire stations to improve responses times, affordable housing, purchase of sites for affordable housing and branch libraries, cybersecurity for City operations, and Civic Center seismic improvements. Because payments for existing bonds are decreasing in the future and refinancing opportunities have decreased annual costs of previous bonds, the measure is not expected to increase Salem’s bond tax rate above the current rate of $1.20/$1,000 of assessed value.
The first meeting of Salem’s Bond Implementation Oversight Committee is scheduled for February 24, 2023 at 4 p.m. Membership of the Committee includes Mayor Chris Hoy, Councilors Stapleton and Varney, community members Bob Cortright and Mike Herron. Councilor Nishioka serves as an alternate.
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