City plans $8.4M in utility improvements
The city of Troy plans to refinance its existing revenue bonds and generate an additional $8.4 million for capital improvements in electric, sewer and water infrastructure.
As part of the effort to capitalize on market rates, the city will reissue its existing 2002 revenue bonds, adding the additional capital for two major projects: $3 million to provide a match for the $6 million water and sewer improvement project and $5.4 million for utility department projects, including a new 20 megawatt substation on the Elba Highway, a 20 MVA line with four feeder lines on the Elba Highway and several additional line repairs and enhancements throughout the city.
“Doing this will really help us to balance our load,” said Mayor Jimmy Lunsford said of the electrical work. “And the sewer and water project will have us set as far as capacity for years to come.”
The water and sewer line enhancement project is funded in part by a $2 million federal grant and a $1 million ADECA grant. The project includes the creation of a water well near the Sportsplex on Enzor Road; installation of additional water mains; installation of a waterline along Park Street, Elm Street and George Wallace Drive; and the expansion of the outfall line which crosses Highway 87.
Because these are revenue bonds, they will be repaid with revenue generated through the city’s utility department. Lunsford said now that council members have given him the approval to put together a financing package with bond attorneys, he will bring them several options to consider. “I expect we will raise electric utility rates for sure, but the council has not made a decision on sewer and water rates yet,” he said after the councils work session on Tuesday. “The council will be looking at options, including extending the bonds beyond 20 years or raising water and sewer rates slightly to repay the bonds. When I get that information together, I will present it to the council in November.”
The council will then approve which option it wants to pursue in refinancing, and the city will take that to the bond market, Lunsford said. The city likely will approve its final proposal for the general obligation bond reissue, which the council has approved in principal, at the same time.
In other business at its Tuesday meeting, the city council:
• Approved the use of capital outlay funds to pay for emergency road repairs to Mallard Drive, Corman Avenue and Sweetbriar Avenue. “These are not just resurfacing projects, these are streets that have failed,” Lunsford said. “We have to go in and rebuild the streets.”
• Appointed Marcus Paramore and Dave Bush to the Public Education Building Authority. “I had forgotten, and others had as well, that the city had already created such an authority back in 2004 when the university wanted to pursue funding under such an authority,” said Councilman Johnny Witherington. The Troy City Schools Board of Education had asked the council to create the authority as a vehicle for the school board to use to enter the bond market so it can refinance its existing bonds to generate cash for capital improvement projects.
Witherington said Jim Rolling is still an active member on the authority, whose only purpose is to assist public education entities in securing bond financing. Paramore’s term will expire in 2012; Bush’s in 2015.
• Reappointed Nick Cevera for a two-year term as municipal judge.
• Appointed Councilman Charles Meeks as the delegate to the National League of Municipalities Congress, which meets in Denver during December.
•Approved an off-site retail beer license for a convenience store located at 198 U.S. 231 North.