City to issue $8 million in bonds for capital projects
As construction season nears, the city of Westerville could issue more than $8 million in bonds to fund its 2013 capital improvement projects.
Westerville City Council heard first readings of five pieces of legislation at its March 5 meeting to issue bonds for different projects.
All of the projects were approved as expenditures when council passed the 2013 budget in the fall, said city Finance Director Lee Ann Shortland.
The bonds being considered by council include:
* $3.685 for improvements to the city's Public Service Complex. The project includes the expansion and renovation of the existing facility, with new office space, upgraded landscaping and a new vehicle lift. The facade of the existing building will be upgraded to match the new construction. The bonds will finance the majority of the project.
* $1.325 million for the "gateway improvement project." The city expects to spend $2.5 million for improvements to the South State Street corridor between Interstate 270 and Huber Village Boulevard. The remainder of the project would be funded through cash reserves from the general capital-improvement fund and the electric enterprise fund.
* $930,000 for the second phase of the South State Street Streetscape Improvement Project. The money from the bonds will be used to purchase the real estate needed for the improvements, and the debt from the issuance of the bonds will be paid back with money from a tax-increment-financing agreement for the area.
* $1.045 million for the first phase of the Hempstead/Walnut Recreational Path. The city plans to spend $1.8 million to create an asphalt bike path with drainage improvements and bridges, and to purchase the right-of-way needed for the path. The remainder of the project would be funded with cash reserves from the general capital-improvement fund.
* $1.045 million for the 2013 annual street rehabilitation project, which involves various degrees of improvements to roadways throughout the city. The city plans to spend $8.073 million on the program this year, with the rest of the project being funded with cash from a variety of other city funds.
Also at the March 5 meeting, City Council heard the first reading of two pieces of legislation needed to refinance $18.9 million in existing debt issued in 2007 for the construction of a new electrical substation.
The first piece of legislation would allow the city for the first time to issue revenue bonds rather than its usual general-obligation bonds. Revenue from the electric utility will repay the debt. Usually, revenue bonds carry a higher interest rate, according to the city staff report issued to council.
However, the interest rate of the 2007 bond was between 4 and 5 percent, and decreases in rates since then would mean revenue bonds could be issued with an interest rate of about 2.7 percent, the staff report said.
In addition to saving the city money, the refinancing also would free up more of the city general-obligation bond load, which does have a cap that the city will near in 2018.
The seven bond-related ordinances are expected to be passed by council April 2 following their third readings and public hearings.