Written by Kelly Kaczala
June 24, 2008
Oregon City Council on Monday will consider selling one year notes totaling $4,975,000 to fund various capital improvement projects.
Council at a committee of the whole meeting last Monday agreed to consider voting on the matter at a meeting the following Monday.
“We would borrow the notes in anticipation of a future bond issuance for these various projects,” said Administrator Ken Filipiak.
“Frankly it’s to our advantage to do this because rates for one and two year notes are extremely attractive right now, better than some of the long-term prospects out there.
Hopefully, a year from now, the market will start to show the benefits of the long-term again.”
This Monday, council will consider the following:
• Selling $325,000 in notes to fund improvements to the intersection of Coy and Pickle roads, which will include grading, draining, widening, paving, constructing curbs and sidewalks, installing storm sewers, catch basins, manholes and traffic control signals and devices. Council already approved the project, estimated to cost approximately $675,000. Of that amount, $350,000 is a grant secured through the Ohio Public Works Commission. “The remainder - $325,000, is what we would issue for a one year term in anticipation of future bonds,” said Filipiak.
• Selling $500,000 in notes to acquire an aerial ladder pumper fire truck in the fire department. Estimated cost of the truck is just over $600,000. “We will borrow $500,000 and pay off a portion of that. We will pay this down in rollover notes in the same manner we have in the past over a five year period, which coincides with the five years of our most recent fire levy renewal,” said Filipiak;
• Selling $2,500,000 in notes to improve Stadium Road between Seaman and Bay Shore roads, to enhance traffic safety and upgrade the municipal storm drainage facilities, also known as the “Big Ditch” improvement project. Plans call for the installation of storm sewers and drainage improvements, removing, replacing and improving existing culverts, constructing new open ditches and channels, and restoring the roadway and related infrastructure. “The proceeds for this will be paid for out of the dedicated income tax for drainage improvements,” said Filipiak. “This is a one year short-term note that we’re proposing.”
• Selling $1,650,000 in notes to pay a portion of the cost of improving Wheeling Street by widening, grading, draining, paving, replacing a bridge, installing traffic control devices and street lights, and relocating waterlines. “Approximately $400,000 of that amount is the rollover from last year which would pay off the existing note for final engineering costs already incurred,” said Filipiak. Approximately $1.25 million is for right-of-way acquisition, which would occur this year.
“This is going to be our largest bond issuance in quite some time,” said Filipiak. “We will have a portion of the bond that deals with improvements to the municipal building falling off next year. That will help us to be able to service this new debt better. We will be reaching a point where it’ll be some time before we will be able to do really big projects. We’re coming toward the end of a cycle where we’re paying off some of our debt. And I think we’re in a good position to finance this over a period of time.”
Councilman James Seaman, chairman of the finance committee, said Filipiak has been involved in long term planning of capital improvements to city buildings.
“It’s not something that’s imminent, but yet it’s something you need to make plans on,” Seaman said to Filipiak. “I know you’ve discussed that. That might require borrowing at some point.”
“Absolutely,” said Filipiak. “We’ve reached a point where our facilities have some age to them. We have to really start thinking very critically how much longer our current facilities will be able to serve us effectively, and start planning for the future. I anticipate any significant debt of that sort will probably be some years after the issuance of this bond barring other revenue sources coming in.”
Also at the meeting, council:
• Heard Mayor Marge Brown give an update on a proposed senior center. “Last year, when the budget was discussed, there was money put aside to look for a company to design a senior center,” said Brown. “We’ve gotten five proposals back. We’ll be looking, as soon as we can get our schedules together, at holding a meeting with two of the companies that have sent their resumes in to us. We’ll keep you posted.”
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