Alma City Council members have approved the sale of the last of three bond issues used to pay for projects approved by voters during a special election Aug. 12, 2014.
During their regular monthly meeting Thursday night, council members approved a final bond of $4,940,000, with the monies going to pay for a portion of fire and street department projects and streetscaping in the downtown area.
Taylor Marshall, a bond attorney with Friday, Eldridge and Clark and Kevin Faught with Stephens financial agency were on hand to explain the details and timeline of the bond issue.
“This will be the third and final series of the sales tax bond that was approved in 2014,” Faught said.
Marshall called the bond ordinance approved Thursday night a “supplemental” to the original 2014 “grandfather” ordinance.
In the 2014 special election, Alma voters chose to continue a 1-cent sales tax and approved park, police, fire, street, streetscape and parking projects and to refund a 2012 bond already held by the city.
Money collected from the continuance of the sales tax goes directly to a trustee who will distribute the tax monies as needed for bond payments, Marshall said.
Three separate bonds have been sold to pay for the city-wide projects. The final bond was sold at a 2.38 interest rate and is set to be closed Oct. 25 and distributed to the city directly thereafter, Marshall said.
Faught told city aldermen that he expects, including the possibility of no growth in current sales tax collections, for all three bonds to be paid off by 2025. The city also is protected if current collections drop, he said.
The city currently collects about $1,200,000 on the 1-cent sales tax each year, but yearly payments for all three bonds is set at about $735,000, Faught said. Even if tax collections drop substantially, the city would still be able to make bond payments, he said.
Marshall noted that cities that incur less than $5 million in debt within the year receive a tax break, and the sale of the final bond is only $60,000 under that limit. Any other debt the city incurs this year will count against that, he said.
Council members also approved for the mayor’s office to have a $200 petty cash drawer to give change to people purchasing permits. The cash can not be used to make purchases.