Yonkers, New York, issued $11.5 million in federally taxable notes in anticipation of a bond issuance later this year.
The bonds mature on September 30, 2024, and pay interest at 5.5%. The city did not apply to major ratings agencies to receive a bond rating.
The bond proceeds will fund various settled claims resulting from litigation against the city and its school district.
The city and its board of education are defendants in several hundred lawsuits and other legal proceedings, according to the official statement accompanying the sale of the bonds. The city’s law department asserts that “while the ultimate outcome of certain of the proceedings and claims is not currently predictable, there is no reason to believe at this time that adverse determination in any or all of them would have a material effect on the City’s financial condition,” the bond documents read.
Many of these disputes relate to real estate, with Yonkers residents contesting the validity of tax assessments on their property. This challenge is known as tax certiorari. There are generally between 2,000 and 3,000 tax certiorari protests filed each year, according to the bond documents. The city has authorized up to $15 million in bonds to fund the costs of independent appraisals and tax refunds in the upcoming fiscal year.
“The City expects to continue to fund settlements and certiorari related expenses through the issuance of bonds and bond anticipation notes in the foreseeable future or until a City-wide revaluation is undertaken,” the bond documents read.
The bonds are general obligations of the city, backed by its full faith and credit.
Oppenheimer & Co served as underwriter on the issuance. Capital Markets Advisors LLC acted as municipal advisor.