St. Albans will refinance bond issue to save more than $167,000
St. Albans City Council plans to refinance $8.5 million in water project bonds to save more than $167,000 in interest over 20 years.
Michael Griffith of Griffith & Associates, the city's certified public accountant, reported last month that the city was expecting to receive a $147,782 refund from the IRS on $10 million in water project bonds issued in 2010 under a federal stimulus program.
At Monday's council meeting, Griffith said he recently learned that the city might not receive all of the refund because of recent cuts in the federal government's budget known as sequestration.
Griffith said the good news is that sequestration has triggered a provision that allows the city to immediately re-finance the bonds.
Mayor Dick Callaway said the existing bonds carry interest rates ranging from 6.75 to 8.5 percent but newly issued bonds are expected to carry an interest rate of about 4 percent, thus saving the city about $167,000.
Another benefit: The existing bonds are taxable but the new bonds would be free of both federal and state tax. Griffith said, "I would anticipate if you do re-issue the bonds, they'll be sold quickly in the market."
Callaway said, "We got a good deal at the time. We have a better deal at this time."
Councilman Stephen Donelson asked why the outstanding principal on the existing bonds is $8.5 million but the proposed ordinance would allow a new issue of up to $9.1 million.
Callaway said the city hopes to lay a new water line on Pennsylvania Avenue. Therefore, it may be proposed at an upcoming meeting that more money be tacked onto the bond issue.
The re-issuance passed by unanimous voice vote. To receive final approval it must come before council two more times and there must be a public hearing.
In other action:
* Councilman Desper Lemon said, "We've got some serious problems with household trash. We've got so many people who don't have trashcans. I've done a survey -- it's mostly rental property."
Callaway said that if a serious violation of the city's ordinances exists, a police officer could issue a citation.
Lemon said, "I hate to see something like that done but sometimes a tap on the pocketbook gets people's attention. I think we need to address this."
Callaway said he would bring the issue to the attention of the city's property inspector.
* Councilwoman Cheryl Thomas said the St. Albans Partnership requested permission to waive the city fee and requirement for a permit for the citywide yard sale. She said that instead of having a sale over a weekend, the plan is to have two sales --- May 11 and Sept. 7. Council approved the request.
During the public forum portion of the meeting Dave Rucker, who said he recently purchased the home at 2311 Monmouth St., praised the city for razing a nearby house. But Rucker said the vacant lot is cluttered with trash and trees and ruts left by machinery.
It was agreed to look into what can be done to improve the property, which the city owns and is preparing to sell.
The next council meeting will be at 7:30 p.m. April 15 in the city building on Sixth Street.