Troy could save over $1mil in debt refinancing
Published 3:00 am Wednesday, August 23, 2017
The City of Troy could reduce their rate by over 3 percent when they refinance a 2011 debt, a potential savings benefit of over $1 million according to financial adviser Rush Rice.
“We have been watching the city’s 2011 utility warrants (bonds) at an interest rate of 5.11 percent,” Rice said. “ We just went through a rating process where smart people from across the country grill us on the city’s financing, investments, economy, infrastructure stewardship of public funds, etc.. Historically and consistently, Troy has excelled in all these areas.
“We would expect to be in the market with this next week. If it holds at 2.98 percent, it would result in a savings benefit of about $1.2 million. As a present-value basis, that’s about 12 percent of the city’s outstanding bonds.”
The resolution that the council approved Tuesday night does not actually authorize issuance of the warrants, but gives the mayor the authority to sign a “warrant purchase agreement” so that Rice can sell it when the market is most ripe.
“This resolution is very important,” rice said. “It’s a ‘parameters resolution’ that authorizes the mayor to sign a warrant purchase agreement as long as the size of the issue does not exceed 3.35 percent…. We’re setting a limit so council can exert control of the process while giving financial team flexibility to take advantage of a good market.”
The council suspended the rules to vote on the resolution immediately and passed it unanimously.
The council also unanimously approved for a community development block grant (CDBG) application to help fund a project that would include resurfacing, replacing water lines for fire protection and revamped storm drains on Boyd and Adams streets.
The project comes in at $500,000 of which the CDBG would provide $450,000.
The council also approved for South Central Alabama Development Commission to handle administrative services and for Goodwyn, Mills and Cawood to handle engineering service.
The city will also be able to hire six new firefighters after accepting a grant that will provide over $500,000 to the troy Fire Department for the new salaries.
The six additional firefighters will fully staff the new fire station, bringing the fire department into compliance with federal regulations.
“This is unheard of for a town of our size, “ said fire chief Michael Stephens.
“this should allow us to go from an ISO 3 to ISO 2 and be on the verge of maybe an ISO 1,” said Mayor Jason Reeves.
The ISO rating system ranks a city’s fire protection standards; ISO 1 is the highest possible standard and can help to improve home insurance rates.
The fire department also got another grant for an all-terrain vehicle that Stephens said the department plans to use at sporting events as well as to assist people in wooded locations that are not accessible by the typical rescue vehicles. The grant is worth $22,000 and completely covers the vehicle.
In other business, the council:
- Approved the repair of a recycling baler to be done by Max-Pak at a cost of $49,000.
- Approved a resolution obtaining permission from Powersouth for troy Utilities to provide electricity to an apartment complex on their deeded right-of-way.
- Approved a resolution that allows the army to inventory the Cobra helicopter that is on display in bicentennial park.
- Approved a bid award of $39,000 for the equipping of police accessories in seven new police vehicles.
- Approved a lump sum payment to city retirees totaling $84,000 in line with the State Legislature’s vote to do the same for state retirees.
The city council will meet again on September 14. The executive committee meeting will begin at 4 p.m. upstairs at City Hall and the business meeting will be held in the City Council Chambers.