Tuesday, August 09, 2016
SAB $7.8 MILLION BOND ISSUE
Beach approves $7.8M bond issue
Posted: August 8, 2016 - 11:08pm | Updated: August 9, 2016 - 10:41am
The city of St. Augustine Beach plans to use part of a loan to pay back remaining debt on a 4.5-acre parcel of land (now Ocean Hammock Park) on A1A Beach Boulevard, which the city purchased for $4.5 million.
By JARED KEEVER
The St. Augustine Beach Commission voted Monday night to approve a roughly $7.8 million loan that will refinance a number of the city’s debts.
Commission members unanimously approved the bond issue, to be issued by the Florida Municipal Loan Council — a part of the Florida League of Cities. According to the city’s agenda, the resolution, labeled Resolution 16-11, authorizes a loan of up to $9.1 million. A memo from the city’s chief financial officer, Melissa Burns, says the difference between the roughly $7.8 million needed to refinance the principals on the loans and the high cap will provide a “cushion” for the financial advisors to keep them from having to come back to the city should there be “any movement in the market.”
The bulk of the money from the loan — $4.5 million — will be used to pay off the debt associated with the 2015 purchase of 4.5 acres of the Maratea property, which is now Ocean Hammock Park. Of that money, $3 million will go to pay back the Trust for Public Land, which purchased the property on the city’s behalf. The other $1.5 million will replenish the money that was taken from the city’s savings to make the first payment on that debt.
The remaining money will refinance a 2004 debt of just under $1.9 million that was used to purchase land for public restrooms on 10th Street. A 2010 loan — representing almost $1.4 million in debt — that refunded a 1999 bond that was used to build City Hall, will also be refinanced. The savings from refinancing those two debts will be just over $360,000, according to Burns’ memo.
The Commission was originally scheduled to vote on Resolution 16-11 at their regular Aug. 1 meeting, but postponed the decision to Monday’s special meeting in order to gather more information.
After Mayor Rich O’Brien opened the recent meeting, City Attorney Jim Wilson explained that a review of city records found that a referendum, passed in 2008, allowed the city to take out a $7 million bond that could be paid back with money from ad valorem taxation.
Of that, less than $5.5 million had been used, so the city will able, in the new loan, to pay back $1.65 million with ad valorem money, which could result in more favorable rates for that portion of the loan, Wilson explained.
“That changes the numbers they work with to our benefit,” Wilson explained.
The discovery will require that the loan be written up as two agreements — one for the ad valorem-backed amount and another for the remainder.
Monday’s motion included language that will allow Wilson and City Manager Max Royle to work out the particulars of the deal.
Morris1 08/09/16 - 02:56 am 20Sensible debt versus nonsense debt.
Sensible debt: assuming debt to acquire a special or otherwise opportunity-sensitive asset that enriches your community. The city of St Augustine Beach assuming some debt to finance the purchase of the oceanfront land that is now a beach park was perfectly sensible debt.
Nonsense debt: Taking on new debt to pay back old debt on routine, ordinary expenses that people decided they didn't want to pay for 10 or 20 years ago because they wanted to spend that money on other things and leave the bill for future generations. That's the Payday Advance Loan formula and it's rather distressing to see it in action here in St Johns County. It's not sustainable.
Thomas Francis Reynolds 08/09/16 - 07:09 am 22Big money, LITTLE CITY ..........
This is a lot of money for a Little Tiny City. The good part of this was at least City Attorney Jim Wilson saved the City a lot of money. We the Residents would have it a lot worst if our previous City Attorney was still there. City contracted Attorney Jim Wilson is a sharp guy. Commissioner England did a great job during the discussion. Commissioner England was able to put into simpler terms for the residents. Comparing the City loan to a home loan. Also Commissioner George did an outstanding job with all the research she did. Commissioner George ALWAYS PUTS THE RESIDENTS BEST INTEREST FIRST ! Now of Course Commissioner Snodgrass thoroughly vetted the whole process. Commissioner Snodgrass always brings the questions the residents are thinking to the discussion. Thank you very much Commissioners England, George, and Snodgrass for saving the City Residents money and for doing what an Elected Official is suppose to do.
Now that just under 1.9 million dollar bathroom loan balance ! Really ? What does it have ? It is just a dumping station and a wash your hands place. Who in their right mind would spend 2 million dollars on a couple of toilets ? Was anyone of the current Commissioners on the City Commission when that happen ? Who ? Commissioner Rich e Rich O'Brien who has been on the Commission from 2002 till present. Well residents, Commissioner Rich e Rich O'Brien is not a frugal Elected Official obviously. It is time for the residents to clean the bathroom at City Hall. DUMP the Unfrugal Elected Officials. We deserve a Clean Bathroom, so please always FLUSH especially in November.
Was Commissioner Samuels there ? Yes but this is complicated stuff. So, ya know...................
Firstcoaster 08/09/16 - 08:39 am 10Refinance their debt?
Seriously? This is like getting a second and third credit card to pay off the first card.
Tell me again why they are a city? Is it to protect some rice bowls?
Morris1 08/09/16 - 12:05 pm 00It's bond market strategy stuff.
Municipal bonds are graded by a bunch of different factors, this seems to be a strategic play to raise their liquidity profile so they don't run the risk of a downgrade and higher interest rate.
St Augustine Beach is a city because it has a different set of interests than the rest of St Johns County, so being a city allows it to manage its own affairs. Kinda shocked that Ponte Vedra hasn't done the same thing.