The City of Ottawa expects to save more than $1 million by refinancing bonds that were issued for the city’s electric system.
David Atteberry, George K. Baum, explained to the commissioners Wednesday, these bonds were being issued to refinance parts of two old bond issues being repaid by the city’s electric system.
The total amount of the bond issue was $1.1 million.
Arteberry said the debt service will be reduced in 2019 and 2020 by deferring payments to 2024 through 2027.
“So with this restructuring, hopefully what you will be able to do is build up your reserves this year and next year to create more operating cushion in your utility,” Arteberry said.
He added the cost for the restructuring the bonds is $231,000, but told the commissioners if they put aside the $1 million in savings that will be realized in reduced payments, the interest may net upwards of more than $200,000, which would nearly offset the cost of refinancing.
“We’re doing this because we need that breathing room to get through the year with a cash balance,” Richard Nienstedt, city manager, said.
The lowest of the three bids for the bond was 3.0 percent by KS State Bank, Manhattan. Arteberry said the bid came under the 3.2 percent they had predicted.
The commissioners also approved temporary notes of $2.15 million for financing of the sewer improvement to Proximity Park, the new industrial park located south of Ottawa along Kingman Road.
The best bid on the temporary notes was submitted by US Bank at 2.3 percent, Arteberry said.
The commissioners approved an agreement with KDOT for the sidewalk project near K-68 and Main.
The sidewalk will be on the west side of Main and run from K-68 past Casey’s and the Coop to Tecumseh Street.
The cost of the project is nearly $440,000 with KDOT financing 80 percent. The city’s portion will be just less than $88,000.
Commissioner Mike Skidmore said the project will enhance the area and it is a good return on the investment with the city contributing 20 percent of the cost.
Wynndee Lee, director of community development, said it will enhance the safety of the area and improve access to the downtown corridor.
She said the timeline for the project is the design portion should be completed in the fall with construction starting next spring.