To fund necessary repairs and upgrades at city owned facilities and re-finance two existing loans, the Peachtree City Council Thursday night approved the sale of $6 million in revenue bonds.
The bond issue will cover $3 million in improvements and the refinancing of two existing loans.
The city got an outstanding interest rate of 2.16 percent, thanks to the city’s excellent credit rating, officials said. And when paired with the payoff of another bond series earlier this year, the net increase on debt service is only $165,000 a year, according to Finance Director Paul Salvatore.
Recently, Moody’s Investors Service increased the city’s rating from AA-2 to AA-1, and S&P kept the city’s AAA credit rating unchanged.
“In good economic times that is a significant achievement, but to receive that rating after literally years of a down economy and declining revenues is absolutely incredible,” said Councilwoman Vanessa Fleisch. “The citizens of Peachtree City should feel confident in the economic stability of this city and our staff needs to be commended for their ongoing efforts in this regard.”
The loan refinancing will save the city a projected $148,000, officials said.
The city will be on the hook for repaying the bonds, with the debt service for the bonds and refinancing estimated to cost $634,000 a year over a 10 year period.
Among the $3 million in projects is some $454,000 set aside to replace the bubble that is erected over the Kedron pools for the offseason and $405,000 in repairs to several city fire stations. Also on the plan is $500,000 to expand the parking lot at the city’s Baseball and Soccer Complex to its full capacity.
Funds also will be used for repairs at ballfield restrooms, replacement of the surface at the All Children’s Playground, tennis court repairs and more.
Another project includes $100,000 for repairs to the cast house at the city’s amphitheater.
Councilman Eric Imker noted that while the city has some 14 different debt instruments outstanding, nine of them will be paid off within the next five years.
Salvatore noted that the S&P evaluation noted that the city had relatively low debt levels.
The $2.6 million in refinanced projects includes the remaining $1.88 million in principal from a bricks and mortar loan from 2007 and the remaining $746,000 in principal from an energy performance contract which resulted in energy-saving fixtures being installed in city buildings to save on utility costs.
Officials have said the bond will pay for capital improvements only, not for any operating expenses or routine maintenance.
The bonds will be sold on the open market in denominations of $5,000, Salvatore said. The closing date is slated for Oct. 27.
Part of the reasoning for using a revenue bond was because the city has run out of capacity for financing through its lease-purchase program.