Peachtree City has been looking for a way to borrow more money at a cheaper rate.
They found it in a newly created city Facilities Authority that will address the potential acquisition of new bonds and/or the refinancing of existing bonds.
The authority will also address some of the city’s aging infrastructure needs.
The new board met June 29 to elect officers and again on July 1 in an informational meeting to get a look at potential bond refinancing and to review current facilities maintenance needs.
The make-up of the Facilities Authority board includes members of the City Council, with Councilwoman Vanessa Fleisch elected to chair the authority, Councilman Eric Imker elected as vice-chair and Peachtree City Finance Director Paul Salvatore as secretary-treasurer.
Fleisch at the outset of the July 1 informational meeting gave a brief summary of the context through which the Public Facilities authority would operate.
“This new authority was created out of the need to give the city another funding mechanism to help support its aging infrastructure,” Fleisch said. “Through this authority the city will be able to refinance current bonds and will also have the ability to create new bonds to fund the improvements that the city needs.”
Fleisch also noted that the July 1 meeting was intended to provide an overview of the city’s bond status and would not include any prioritization of projects that might be needed. Nor would any votes be taken, Fleisch added.
“Due to the economic climate over the past few years the city has not been maintained in the way it should have been. From the foundation of the library to the bubble at the aquatic center there are facilities across the city that need immediate attention,” said Fleisch, noting the decisions in the city’s recent history that led to the inability to no longer put off arriving at a solution to some of the aging infrastructure needs.
“These amenities and facilities are at the heart of what all of us know is the foundation of the quality of life here in Peachtree City and this new authority will have the ability to provide the resources that will maintain that quality of life,” Fleisch said.
Once underway, the meeting essentially covered two issues: a look at which of the city’s bonds might be refinanced and an overview of needed facilities maintenance needs.
Salvatore presented three of the city’s bonds that would be eligible for refinancing and where cost savings on interest could be generated. Those included the 2004 General Obligation Bond on the library, the 2007 Brick & Mortar note and the 2006 Equipment Lease.
Present value savings from a refinance on the $4.9 million General Obligation Bond that carries a 3.4 percent interest rate would be $51,706 as of Sept. 1, Salvatore said. A refinance of the $2.35 million Brick & Mortar note that currently carries an interest rate of 3.96 percent would amount to $80,930 while the $1.279 million Equipment Lease note at 4.029 percent interest would generate $29,369 in savings.
Salvatore said the projected savings had been considered by a financial officer familiar with bond refinance though he did not state the interest rate. Salvatore did note that some of the current city bonds would not be eligible for refinancing since the pre-payment penalty would offset any savings that would otherwise be realized.
The second portion of the meeting dealt with current and ongoing facilities maintenance needs. Used for informational purposes only, the board was presented an initial list of needs by city Public Services Director Mark Caspar.
The list of 141 items was taken largely from maintenance and repair needs at only two locations, the library and the Kedron Fieldhouse. Some of those items represented ongoing needs that spanned a number of years, the issue that Fleisch has addressed earlier in the meeting.
Caspar stressed, and the board agreed, that the list was preliminary and was by no means prioritized. Caspar will prioritize the list and present it at a Facilities Authority meeting in the coming weeks or months.
It was also noted at the meeting that the function of the Facilities Authority is to make recommendations to the City Council. It is up to the City Council to authorize the Facilities Authority to proceed with the acquisition of new bonds or the refinancing of existing ones.
Authority member and Mayor Don Haddix at both meetings expressed the idea that proceeding with the authority before the City Council could undertake upcoming budget talks was premature. The board appeared to disagree and with little discussion continued with the agenda.
The organizational meeting of the Public Facilities Authority occurred two days earlier on June 29. That meeting was held solely to elect officers and adopt the by-laws and required resolutions.
The brief meeting ended with Fleisch elected to chair the authority and Imker elected as vice-chair. Salvatore was elected secretary-treasurer.
Asked after the meeting if there was a reason why he voted in opposition to Fleisch being elected as chair on the 4-1 vote, Imker replied, “No.”
