Bond proposal moves forward
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The Carlisle City Council met during a special meeting May 30 to discuss making changes to a city bond and purchases for the Police and Court building.
Jack Truemper with Stephens Inc. of Little Rock presented the council with two options for the bond issued in 2004 for $1,760,000. The first option Truemper presented was to reissue the bond for cost savings. The bonds current interest rate is 4.367 percent. Truemper said the city can save an estimate of $118,892 by reissuing the bond at a lower interest of 2.5 percent.
There would be a three to four week period before they would be able to rework the bond, according to Truemper. He said he has no way of knowing at this time what the rates would be as the interest would be based on the market interest rate at that time.
“Rates change daily,” Truemper said. “There would be not a cost unless the city chooses to refinance the bond.”
The second option would be to refinance the bond to raise money. Truemper used $350,000 for a new satellite meter reading system for his presentation. Although the interest rate would be lowered, by increasing the amount of debit the payment would increase an additional $20,000 per year. Truemper said the increase was because the bond can not be extended further in years to lower the cost. The current maximum annual payment for the bond is $134,028.
Truemper said there is a five-year call date, which will not allow the bond to be paid off within the first five years.
“We wouldn’t be doing out job if we didn’t save the city $118,000 over an 11 year period,” Mayor Ray Glover said. “I would recommend doing that.”
Alderman Mike Walker brought to the council’s attention that by making any changes to the bond, the city will not be able to make any changes in the future, in the event there is a need to raise money for another project. Walker referred to the work needing to be done in the next year or two on the oxidation pond.
“If we do this refunding and we have that five year call,” Walker said. “We have rock filters that need to be clean, possibly all replaced.”
Walker said the cost to replace the filter may be around half a million, as cleaning the filters cost over $100,000.
After further discussion, the council unanimously voted to move forward with preparing to reissue the bond.
Also during the meeting, the council voted unanimously approved expenditures and a payment to Arkansas Metal Builders (AMB) for the police and court building. The council authorized expenditures up to $112,608 from the city court account and city automation fund per Judge Joe Svoboda. Funds will be used for the purchase of furniture, cabling, camera and intercom system, and other items for the police and court building.
A payment of $54,910 will be made to AMB.
The next regularly scheduled council meeting will be at 6 p.m. June 18 in the Civic Center.