Posted: Tuesday, March 16, 2021. 1:18 pm CST.
By Ruben Morales Iglesias: “We hear the cry of the people. We know streets and drains are a big issue in the city, big issue in the rural areas, big issue everywhere. Streets and drains. That is not going unheard,” Belize City Mayor, Bernard Wagner, said in an exclusive interview with Breaking Belize News.
“We want to make sure that the quality of life of our residents in Belize City continuously improves,” Wagner said.
To fulfill that promise the Belize City Council is looking to consolidate the municipal bonds and build more streets and drains.
The Belize City Council, Wagner said, is now looking into floating a new municipal bond that will consolidate the $11 million leftover from 2018 plus the six million in short term security certificates into a $25 million package that will pay off the $18 million owing and utilize the remaining eight for more infrastructure in Belize City.
Wagner said that for the first three years of his tenure the City Council had to be very prudent and disciplined to meet the financial commitments left behind by the previous City Council in 2018, particularly the municipal bond raised to build streets, but that they were able to manage.
He said the Belize City Council cemented 68 streets in Belize City during his first term in office and plan to do more now.
Wagner said that they still have eleven million to be paid in 2022 and 2024 when the bonds mature.
“Those bonds that will become due in 2022 and 2024 will require some sort of restructuring because we haven’t been collecting head tax (on tourism) and the subvention can’t stand alone to service those bonds,” Wagner said. “We already started negotiations with those bondholders for the restructuring of those bonds from short term to long term.”
Wagner said that during his first term at the helm, the Belize City Council made the environment compatible with the business sector. He said that relationship will help in making the floating of the municipal bonds a successful enterprise.
Wagner said that the bonds will be floated once an all-encompassing bill is approved by Government. He added that legislators are working on a bill that will allow all cities and towns in the country to float their own bonds.
He said that he is sure there are investors who will support the municipal bonds.
“We know that there’s a lot of money in the banking system, institutional investors have a lot of funds sitting around with very small returns and that is why we feel like the municipal bond will be a very attractive investment for any investor,” Wagner said. “Those institutional investors that I’m speaking about, like insurance companies, statutory bodies, they are only receiving less than one percent on their deposits. You have all these monies collected from insurance coming in, you need to reinvest those monies in an optimal way so you get a fair return so you can continue to grow your portfolio. So, if you are only receiving one percent, it won’t work for you. (Investing in municipal bonds) you’ll increase your return to 6.5 or 7 percent, which is huge compared to one percent.”
But what guarantee is there?
“Municipal bonds are the safest investment all across the world because you are investing in a city and a city to some measure can’t default because you have the power of taxes,” Wagner said. “If the city can’t pay, you don’t have to pay them the taxes you owe them. That’s the safety net.”
Wagner said he projects that the Municipal bonds might be floated by year’s end.
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