City’s sewer project refinancing plan could save $1.5M
Published 8:54 am Tuesday, February 26, 2013
The City of Bainbridge’s plan to re-finance the bonds used to pay for work associated with its Sewer Master Plan could save taxpayers as much as $1.5 million, according to City Manager Chris Hobby.
The loans, about $12 million total, are low-interest loans provided by the Georgia Environmental Facilities Authority (GEFA), which is funded by the state government. The city is approved for up to $16 million.
To date, the city has completed three phases of its master plan: Alice Street/U.S. 27 South and major upgrades to the city’s sewage treatment plant, the Douglas West project and just recently, the Douglas East project.
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The fourth phase, called the Flint River sewer project, will extend sewer lines to areas between the Flint River and State Route 97 North, including Liz Felty Lane and the surrounding neighborhood in northeast Bainbridge. However, there is not currently a start date for the fourth phase.
The goal behind implementing the sewer master plan in four years, instead of the originally forcast 20 years, was to reduce the usage of septic tanks within the city, due to environmental concerns, according to Hobby. The idea was also to save money, as the material and engineering costs of the sewer extensions would have increased over time, he said.
Because GEFA loans don’t have to be paid back until projects are completed, the city hasn’t actually made any principal or interest payments as yet. Therefore, refinancing the existing $12 million debt to a lower interest rate will save the city about $75,000 per year, or $1.5 million over the 20-year life of the loans, Hobby said.
Back in 2008, the city issued bonds through SunTrust at a rate of 4.57 percent.
On Tuesday, Feb. 19, the Bainbridge City Council approved a re-financing of the bonds through Raymond James — Morgan Keegan, a major North American investment bank with headquarters in Memphis, Tenn., and St. Petersburg, Fla. Although the re-financed bonds’ interest rate won’t be set until the bonds are issued, Hobby said an evaluation of market conditions suggests the new rate could be as low as 2.61 percent.
The Council agreed to pay an underwriting fee of $59,400 to Raymond James — Morgan Keegan. Hobby said the total cost of re-financing the bonds could also include $25,000 to $30,000, including the cost of obtaining a certified credit score for the city government.
Other bids received from firms wishing to underwrite the re-financed bonds were $69,000 from Merchant Financial Corporation of New York City, N.Y., and $72,000 from SunTrust of Atlanta, Ga.
In other business, the council:
• Approved, by unanimous vote, the approval of a alcoholic beverage license for Delanta Washington, doing business as Kay’s 101 Buffet, Bar and Grill, 1037 Georgia Highway 97 South. The license will allow for sales of beer, wine and distilled spirits for on-premises consumption.
Bids and Bills
Bids: $8,418 from Skylogic of Phoenix, Ariz., for a system that will allow wireless control of lights at Bill Reynolds Sports Park 1; $4,079.60 from BSN Sports of Jenkintown, Pa., for new benches at Bill Reynolds Sports Park 1; $6,212.02 from Home Depot of Bainbridge for electrical supplies associated with a new stormwater holding pond on Amelia Avenue (city to be reimbursed by Memorial Hospital).
Bills: $28,039.75 from the Decatur County Board of Commissioners for monthly landfill and inmate labor fees.