$10 million to go to new projects; remainder represents refinancing of old debt Wednesday, April 30, 2008 By RYAN DEZEMBERStaff Reporter
GULF SHORES Aiming to pay for a list of projects that includes the city's new tennis center at Johnnie Sims park, a new fire station and storm shelter near Jack Edwards Airport and the renovation of three public buildings, the City Council on Monday voted to issue $17 million in bonds.
Of that total, about $7 million was raised to refinance existing debt from 1996 and 1998 bond issues, city officials said.
In doing so, taxpayers will save about $436,000 over the life of the old debt, said Ken Funderburk, an executive vice president of Merchant Capital, the Montgomery-based investment bank that handled the bond sale.
Gulf Shores hasn't extended how long it will be making payments on the old debt but merely cashed in on lower interest rates, said Funderburk, a former director of the Alabama Development Office.
"You just took what you had and exchanged it for a lower number and some savings," he told council members Monday.
Mayor G.W. "Billy" Duke III also said by refinancing, the city will be able to defer about $235,000 in payments this year.
While the old debt will be repaid as originally planned, the $10 million for new projects was raised through 20-year bonds that will mature in 2028. The city has locked in to a 4.4 percent interest rate for the life of that debt, Funderburk said.
City officials have been planning the bond issue since last fall, and at one time it was planned to raise about $14 million. Eventually elected officials decided against buying two tracts on the southern shore of the Intracoastal Waterway and reduced the amount they planned to raise to $10 million.
Though the federal government has pledged to give Gulf Shores $2.8 million for the storm shelter and new fire station, the city will have to spend about $2.7 million from the bond proceeds to finish the projects.
Other major expenses that the bond sale will pay for include paying off the
$1.2 million remaining from the city's purchase of two buildings across from City Hall and $1 million to turn that space into municipal offices.
Also slated to be funded by the bond proceeds are:
The $270,000 renovation of the Adult Activity Center.
Some $721,000 for new seating, added ball fields and other work at the city's Sportsplex.
Meyer Park improvements to the tune of $210,000.
Design work for a planned justice center that is expected to cost $125,000.
The $220,000 renovation of Fire Station No. 3 on Fort Morgan Road.
/CUT/.92/CRYAN DEZEMBER/ RegisterThe Gulf Shores City Council on Monday approved a $17 million bond issue that will raise $10 million for new projects, including the city's $800,000 portion of the $2.5 million tennis center under construction at Johnnie Sims Park.