The city is offering its citizens a chance to earn some extra cash by investing in education.
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Juneau will sell $2 million in general obligation bonds to the public this weekend from the $54 million of bonds voters authorized for the construction of the new high school in the Mendenhall Valley. Voters approved the bonds in the Oct. 5, 2004, election.
"We normally wouldn't sell bonds this way, but we do it because the locals like to invest in the city," city Treasurer Barbara Rolfe said.
The bonds will be sold to Juneau residents beginning at 9 a.m. Saturday in the Assembly Chambers of the city's Municipal Building. The minimum bond purchase is $1,000 with maturity range lasting from one to 15 years. Interest rates will be posted the day of the sale.
Rolfe said this will be the fifth time the city has offered its citizens the option of buying such bonds, which are usually purchased by institutional investors.
"It's not very common, but the public seems to like it," she said. "The local citizenry likes to invest in the local government, in the city."
Rolfe said the amount of bonds sold to the public has increased over the years, with the sale on Saturday being the most the city has ever offered to its citizens.
In 1996, the city sold $300,000 in bonds to residents out of $4.3 million approved by voters for renovation of Riverbend Elementary School.
In 1997, $527,000 in bonds went to the public from a $3.91 million approved by voters for school technology.
In 2000, the city sold $657,000 in bonds from $3 million it was authorized to sell immediately from $62.9 million approved by voters for the valley High School. The issue was brought back to the voters, which led to the eventual $54 million bond issue being approved.
In 2003, the city sold $1 million of bonds out of $15 million authorized by voters for capital improvement projects, including improvements to harbors and the sewer system.
City Finance Director Craig Duncan said buying the bonds could be a good investment for citizens who are in the right tax bracket and want to invest in the city.
"It's a good investment for the certain individuals because the interest rates that we are offering are competitive," he said.
"One of the benefits is they are tax exempt and so it's not a reportable item for income tax purposes," Rolfe said. "That's one of the big draws because your tax-equivalent yield is pretty nice."
Of the $54 million authorized by the voters, bonds totaling $8 million have already been sold. The remaining $44 million will go out for competitive biding to institutional investors.
Duncan said residents interested in buying bonds on Saturday must come to the Assembly Chambers and will be required to pay at least a 3 percent deposit at that time. Those paying with personal checks must pay the full amount no later than 4 p.m. April 24. Those paying with money order, cashiers check or cash are required to pay the full amount no later than 4 p.m. April 28.
Interest from the bonds will be paid to investors twice a year, on May 1 and Nov. 1. Rolfe said the principal amount will be returned to the investor once the bonds mature.
Rolfe said investing in Juneau is a pretty safe bet. The city received a high rating from Moody's Investors Service during its most recent review in October of 2004, she said.
"We feel pretty confident that the city is in good financial health," Rolfe said.
Eric Morrison can be reached at eric.morrison at juneauempire.com.
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