BY ELENI HIMARAS
reporter@ltview.com
During a special meeting of the LMUD, the board of directors unanimously approved to sell $5.87 million worth of bonds to Morgan Keegan & Co., Inc., at an extremely low interest rate of 4.4 percent.

 “To get eight bids in this market is outstanding,” said MUD financial adviser Dan Wegmiller said. “You got a lot of interest.”
The MUD saw proposals with interest rates between 4.4 percent and 4.8 percent. This is substantially less than other area MUDs who were offered between 4.8 and 6.9 percent interest rates for their recently sold bonds.
“We’re up to one to two percent better across the board,” Board President Tom Rogers said.
Wegmiller said this interest rate means that over the entire maturity of the bond it will be more than $1 million cheaper for the LMUD than they had initially projected, averaging a savings about $60,000 per year.
The low interest rate came from the recently announced AA- bond rating given to the district by an independent agency from New York, Standard and Poors. The highest rating the company gives out is AAA. Wegmiller said the other MUDs who had recently sold bonds were given ratings that ranged from BBB to A-, but that none had achieved the high rating the Lakeway entity did.
“This rating came based on access to the Austin area, the low tax rate, the sound financial position and the high assessment value,” Wegmiller said.
The city sold more than $3 million dollars in bands at the end of last year to pay for the new water tank. Bands have a maturity rate of one year while bonds have a longer maturity of 10 years. Three million dollars of the bonds will immediately go towards paying off the bands and the rest will be spread amongst various projects.
Both board member Kay Andrews and members of the audience questioned the haste in which the decision had to be made. The bonds were open for bid on Monday and the decision had to be made Wednesday, prompting the LMUD to fly General Manager Richard Eason back from a conference in Galveston just for the special meeting.
“This is a standard practice. They want to know immediately,” said legal advisor Paul Phy. “If you don’t play that game, you won’t get any bids.”
Audience members commended everyone who had worked on the bond program for their hard work at the end of the least contentious LMUD meeting in recent history.