Senoia sells bonds and creates financial authority

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Sarah Faye Campbell/Newnan Times Herald

Bill Camp of Raymond James talks to Senoia City Council about the bond sale.

The City of Senoia has successfully sold the bonds to refinance existing debt, and the city is moving forward with setting up its own Public Utilities Authority to fund future projects.

The city issues $5.2 million in bonds to pay off existing bond debts. Because the new bonds are priced lower, the city will save $881,000 over 20 years on the bonds. The bond sale was held last week, and will close on January 27.

These bonds are revenue bonds, which will be paid for from revenue from the city’s water and wastewater facilities.

By creating the Public Utilities Authority, the city will be able to use bond financing for future projects that do not generate revenue, such as a potential new municipal complex.

At an invited meeting, the council voted to approve the bond resolution, as well as to approve the City of Senoia’s formation of the Buildings and Facilities Authority.

The council approved a resolution to demand “domestic legislation” in the Georgia General Assembly to create the authority, and state Senator Matt Brass and State Representative Josh Boehner will take over the city-specific legislation.

Quetta Province established its own Public Utilities Authority in 2021. This authority can issue bonds not only for the province’s projects, but also for the projects of the province’s municipalities.

But Senoya decided to create her own authority instead of using the Quetta Public Utilities Authority.

“We kind of want to do our own thing,” said City Attorney Drew Wallen. “The county spoke to us and made an offer. We felt we’d rather do it ourselves.”

The legislation establishing the new authority must be in effect by 1 July at the latest. “Then we can explore funding possibilities,” Wallen said. By that time, Wallen said, we hope the city will have a solid idea of ​​the projects it wants to pursue.

Bill Camp of Raymond James said the city had a successful day in the bond market. “This is the first week we’re seeing any bond issues in the state for 2022, so you don’t have any competition,” Camp told the board. Prices are starting to rise, so Camp said he was very happy with the bond’s pricing when it was set.

With costs added, the bond’s interest rate will be 2.64%. Camp said the debt being refinanced was more than 4 percent.

While the savings over the life of the bond is $881,000, the “net present value” is $818,000. Using that, the savings from the refund is about 17 percent.

“We usually tell people that 3 percent of savings is a good payback,” Camp said.

Camp said they are also buying a security policy that secures the bonds in addition to the required reserve. This means that the city’s $552,000 reserve in the Water and Sanitation Fund can be used for other projects.

Whalen said the recommendation is for the city to keep that money for now, and see how the Keg Creek sewage treatment plant project goes.

“Sewage projects are notorious for cost overruns,” he said. We may need it in the future.

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