2017-08-10 / Front Page

City discusses refinancing of previous USDA bonds

A possible USDA bond refinanc­ing was discussed by the Lincolnton City Council at its latest meeting. While no action was taken, a pos­sible vote to go ahead with the pro­cess could occur during or before next month’s meeting of the group, depending on the known rate of the refinancing.

“I met with council Monday a year ago now to look at the pos­sibility of refinancing the existing USDA bonds, not with the project that just got underway, but one from 1999 and 2005,” Trey Mon­roe, managing director of Stifel Investment Services, said. “At that particular time everyone agreed that it made sense to wait until you got a little bit further down the road with the project, and that’s come together very nice for y’all, so I wanted to bring these ideas back to y’all for consideration.

“We do have some actual com­mitments from buyers if we’re going to move on with refinancing the existing debt. Currently the ’99 and ’05 USDA bonds, if we bundle those together the average rate on that debt is about 4.4 percent. We have offers between 3.25 and 3.65 percent to refinance that debt,” Monroe continued. “The real ben­efit to the city here is in the ability to get the existing debt paid off faster, and that’s when you realize the sav­ings over time on the debt service obligation. Your payments aren’t necessarily going to change a lot in the immediate term, so it’s going to be about the same that you’re pay­ing now, certainly no more, maybe a few thousand dollars less per year than you’re paying now.”

As a means of simplifying the matter, Monroe explained, “think of it as your home mortgage going from a 30-year mortgage to a 15- year mortgage, where you just get the stuff paid off a lot faster, and it’s of no more cost to the city than you’re already paying – that’s the concept that we have.”

Monroe presented two possible options for the refinancing. The first was through public bond offerings, and the second was through private bond offerings.

“The private bond offerings are akin to getting a private loan from USDA, as it looks at a narrow scope of investors that buy municipal bonds, and you avoid a lot of cost, time, and paperwork involved in public bond offerings,” Monroe said.

Of the few routes presented, Monroe explained that all of them are 20-year bond refinancing op­tions, which are predicted to elimi­nate two-and-a-half to three years of debt repayment.

“Depending on which of these options you take, it would save the city at the time anywhere from $300,000-$660,000,” Monroe said.

Having recently spoken with representatives with USDA, Mon­roe further explained that they are okay with the refinancing as long as payments don’t increase, or interfere with the current grant and loan with them.

City Attorney Barry Fleming likewise verified this information with the city’s bond attorney – hav­ing examined Stifel Investments as a reputable company – and high­lighted other legalities involved in the refinancing process.

In other business, council ap­proved a valve repair at the water treatment plant by Goforth Wil­liamson, Inc. (GWI) for $6,025.

Council voted to have Walter Ware remove a tree on Florence Street for $150.

Blake Bass was also given ap­proval to use the city’s right-of-way to conduct his work on Wallace Wells Circle.

After a brief Executive Session, council took no action regarding four personnel matters.

As a part of his Planning and Zoning report, Code and Building Enforcement Official Jim Farrand updated council on the possible rezoning of a property on Ward Street.

After the latest meeting of the P and Z board, members made the recommendation that the C-1 property be changed to an R-1 clas­sification, with the condition that in the light of the owner’s death, or in the event of a change of ownership, the property automatically revert back to a C-1 classification. “The condition of reverting back to a C-1 would help the city with the spot zoning aspect of changing it from C-1 to R-1, because it’s C-1 all the way around,” Farrand said.

“You can’t change zoning nor­mally, unless you go through a certain process,” attorney Flem­ing commented. “So, once you go through a change from C-1 to R-1, you would have to let the whole public know that you’re going to change back to C-1 again.”

In consultation with an official permitting chart, Fleming ex­plained, “We can have something called conditional usage, which means you get permission to do something in the zoning, which nor­mally, otherwise, isn’t allowed.

However, Fleming explained that the recommendation by P and Z is not allowed, stating, “basi­cally, where you are is that you can change it to R-1, but it can’t revert back automatically without going through the same process.” By “the same process,” Fleming elaborated that conversions of properties must be properly advertised for a certain period of time, along with other legal procedures.

Council voted to change the property to an R-1, however with no conditional use.

Additionally, Farrand updated council on the possible annexation of a property on Rowland York Road, noting that there is certain confusion regarding property lines, and other issues that have waylaid the process.

“I’m trying to figure out the best way to go about things,” Farrand said.

In a water department report, Adam Minyard noted that water production for the month of July was 17.7 million gallons, and that the plant received 2.95 inches of rainfall.

He included that the middle intake was changed to help with manganese issues; that the raw water generator had 380.4 hours on it; that the water plant generator had 779.7 hours on it; that 10 meters were turned off on the cutoff list; and that there were no major leaks or repairs.

Ben Alligood reported that at the wastewater treatment plant, the county had an approximate influent of 623,000 gallons; the city had an approximate influent of 6.3 million gallons; and that 6,918,000 gallons were treated effluent/discharged.

Alligood also reported that the refrigerator for samples, and other equipment, is in need of repair or replacement.

The Lincolnton Police Depart­ment answered 225 calls for ser­vice throughout July. These calls included 20 incident reports, 35 miscellaneous calls, two accident reports, along with three citations, and 15 warnings.

“We currently have electrical work that needs to be done in the police department to help prevent an issue of overloading outlets. I would like to get approval to get an estimate to get replacement outlets, as well as adding two outlets,” Chief Brandon Lively said.

“We are currently working on a new patrol method that will encour­age more proactive policing in our neighborhoods, as well as monitor­ing our heavier traffic neighbor­hoods to cut down on complaints,” the chief continued. “We still have issues with our ’05 and ’07 Crown Vics periodically that are causing our shop bills to rise.”

In light of school commencing on August 2, Lively requested that any and all complaints or concerns surrounding the schools be given to him directly, so that issues may be addressed as quickly and efficiently as possible.

The next meeting of the Lincoln­ton City Council will be held on Tuesday, September 5, beginning at 7 p.m. at City Hall.

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