Fort Lauderdale, Fla., City Commissioners Tuesday selected the finance team for the proposed issuance of $340 million of taxable pension bonds.
Citi will be the senior manager along with JPMorgan, Bank of America Merrill Lynch and Morgan Stanley. Squire Sanders LLP was appointed bond counsel and Steve Bullock PA was named disclosure counsel.
The commission is expected to be asked to approve the bond issue in September. The city is trying to cut down the cost of its 30-year liability by using pension bonds, which will also fund a $4.3 million liability in the fiscal 2013 budget. However, the deal is controversial.
Vice Mayor Charlotte Rodstrom said the city should continue to pay the liability annually instead of risking better returns by investing bond proceeds in the stock market. "My risk tolerance is not very high," she said. "I don't believe in paying debt with debt."
Mayor Jack Seiler said he viewed the deal as a refinancing of an existing obligation. He also said that the city would continue to work on pension reform.