City Eyes $9.6 Million Bonds for Streets, Federal Recovery Zone Designation

County Help on Super Build American Bonds Would Save Interest Costs

September 20, 2009
By: Dave Rogers

At long last, the city is moving ahead on a plan to improve its pothole pocked streets!

The City Commission Monday, Sept. 28 will consider a capital improvement bond issue of $9.6 million.

The bond issue would be aimed at improving streets as well as the electric, water and sewer systems.

Under some scenarios identified by City Manager Robert V. Belleman, the city would receive reimbursement of up to 45 percent of its bond interest costs from the federal government.

The bonds will be issued without a vote of the electorate unless a petition requesting such a vote is signed by at least 10 percent of the registered voters. Residents will have 45 days to request a vote on incurring the debt.

County Executive Thomas L. Hickner is considering whether to recommend to the Board of Commissioners the transfer of its Recovery Zone Economic Development Bonds (RZEDB) to the city, according to a report by Mr. Belleman.

The city qualifies as a federal recovery zone because of its rate of unemployment, rate of home foreclosures and general distress, according to the manager.

Under the program the county would transfer its allocation of $9.6 million in RZED bonds to the city, according to Mr. Belleman.

He has plotted various bond issue scenarios for the commission to consider, including:

A Limited General Obligation Bond Issue under the Build America Bond Program, saving approximately $925,000;

The RZED bond issue, saving approximately $668,000;

Taxable RZED bonds, saving about $1.6 million;

Limited Tax Obligation Bonds under the taxable Build America Bonds program, saving approximately $2.1 million; and

The typical tax exempt bond issue for capital improvement projects, using neither the Build America or RZED bond programs.

The manager recommended the commission adopt a notice of intent resolution for the RZED bonds, provided the county allocates its capacity for bonds and designates the city as a recovery zone.

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