Refinancing bonds to save city money
BY DALE HOGG
The Great Bend City Council Monday night approved pursuing the refinancing of bonds, action that could save the city over $200,000.
The Council adopted a resolution that authorized the sale of general obligation bonds issued in 2004 and 2007. It also selected George K. Baum & Company of Kansas City, Mo., as the underwriter for the bonds, and hired Gilmore & Bell of Wichita as the bond counsel.
The move also paved the way for various officials to sign and submit documents to allow the project to move forward.
Final action will take place at an upcoming meeting. The Council is looking at Aug. 5, but would like to make the final approval earlier to take advantage of the historically low interest rates now available.
“We watch for refinancing opportunities,” said Roger Edger of George K. Baum. “Here you have the opportunity to save substantial money by refinancing two of our previous bonds” over the 10-year life of the bonds.
“General market interest rates are lower today than in past years when the city issued the bonds,” said Edgar, who gave presentation Monday night. “The city has the opportunity to refinance its existing bonds to reduce interest expense and save taxpayer dollars.”
The current interest rates on the bonds averages 3.7 percent now. Edger said if the city were in the market today, the rate would be about 1.4 percent.
He said the city had a change to refinance a year ago. But, “the savings would have been about a third of what they are now.”
The 2004 bonds, totalling about $2.6 ,million, were to pay for water system improvements. Those issued in 2007, totalling $750,000, funded street repair projects.
Edger said the national bond rating service rates Great Bend at A1. “The city is strong financially.”
In fact, he said he feels the city should have even a higher rating. But, due to the size of the community, it is difficult to get the agency to increase it.
Great Bend is rated as high as any city its size.
In January, the Great Bend City Council supported the use of federal low-income housing tax credits to help finance the building of a 32-unit apartment complex in Great Bend.
However, Great Bend Chamber of Commerce President/CEO Jan Peters told the Council Monday night that those credits did not materialize. So, the developer, Topeka-based Overland Property Group, announced it would not pursue the project.
“They were so surprised by this,” Peters said of Overland Properties officials who said they liked their chances to be approved. The company applied for and received credits for a project in Garden City, an application submitted at the same time as the one for Great Bend.
Companies can submit multiple applications, Peters said. However, there are a limited number of credits, offered through the Department of Housing and Urban Development, offered in the state per year.
Despite the rejection, Peters said the company “is very positive on the project.” It will reapply next February.
Council members found the news disconcerting. “We need housing,” said council member Dana Dawson.
“We’re desperate,” said Mayor Mike Allison. The Amber Meadows development evolved into an area for more expensive homes, which is not what was originally envisioned.
“I see other towns our size getting homes built,” Dawson said. Perhaps, he said, Great Bend should look into what they are doing that Great Bend is not.
“It’s just hard to make the numbers work,” Allison said of launching a housing endeavor. All of rural Kansas, and the rural America, face the same housing crisis.
“We’re pulling out all the stops” to address the housing shortage, Peters said. They are continuing to work with Overland Properties, with other developers, and are looking into grant and federal housing initiatives that might help offset some of the city-born costs for housing infrastructure.
At the Jan. 7 meeting, OPG’s Matt Gillam presented the plan for the project to be dubbed The Reserves at Trailridge. It would have include a club house with laundry, fitness equipment and community room, and a playground.
These low- to moderate-income multi-family apartments would have been located on 5.36 acres near Eight and Grant streets, across the street from Wal-Mart.
The company has already completed about 2,000 apartments stretching from Texas to Iowa, with the bulk being in Kansas.
The firm analyzed the housing situation in Great Bend. “We determined the housing stock here is very small,” indicating the need for more housing was great, Gillam said in January.
Overland Property operates facilities in Dodge City, Garden City, Hays and other communities. Officials there have given the company good reviews.
Their locations elsewhere maintain at least a 90 percent occupancy rate. There are also waiting lists.
By supporting the credits, the city was not out any money. But, company officials said such credits are about the only way to get this sort of facility funded.
In fact, Peters said Monday night that without them, Overland Properties said it wouldn’t consider the project.
This was the only gloomy news during Peters’ monthly economic development report to the Council. She told of Sutherlands Home Improvement, Family Dollar, Papa John’s Pizza, Baskin Robins, the Old Chicago Bistro and the Golden Belt Cinema 6 all opening in May. “It certainly was a wonderful May in 2013.”
In other business Monday night, the Great Bend City Council:
• Began setting dates for budget-related activities. Meetings will take place starting June 17 with a presentation by various agencies and concluded with a budget hearing Aug. 19.
• Approved abatements due to accumulations of refuse at: 1036 Van Buren, owned by Francis and Coleta Haberman, 1201 Van Buren, owned by Christopher M. Barr, and 1439 16th, owned by Brett Terry.
• Approved a request from Surrendered Family Ministries to close Lakin Avenue from Kansas Avenue to Main Street from 4-9 p.m. Saturday, June 15. They are planning hold an event featuring games, food and music on the Barton County Courthouse Square.
• Heard an update on the activities of city departments by City Administrator Howard Partington.