With low interest rates and the City of Orange Beach’s bond rating nearly perfect at AA+, the City Council is moving forward with plans to issue $50 million in bonds to cover over a dozen capital improvement projects in the city.
During its meeting on Tuesday, December 1st, the City Council voted unanimously to allow Finance Director Ford Handley to work with the city’s bond counsel on a warrant purchase agreement to issue General Obligation Capital Improvements Warrants, Series 2021.
“For the audience and those in the community, we are essentially debt free at this time,” Mayor Tony Kennon explained before the council’s vote. “We worked hard to get there but we have a list of capital projects that is a mile long and probably comes close to - depending on how we prioritize - between $50-$60 million. With money as inexpensive as it is now, and money maybe not being as inexpensive after January 20th, it made sense for us to go ahead and take it and put all of these projects on a fast track and get them all done. It essentially doesn’t change our debt service that we’ve had for the 12 years I’ve been mayor - it’s less than 3%.”
The city’s debt service payment in past years was around $4.8 million annually. This bond issuance would be paid back over a 20-year period with annual payments around $3.28 million, Handley said. “That’s still way under what we’ve been paying,” Handley told the council, “and it allows us to get a whole bunch of things done for the citizens in the city in a much shorter time frame.”
Some of the projects expected to be covered by the $50 million bond issue include the following:
- Fire Station No. 1 Complex behind City Hall
- Police / Justice Center Expansion
- Fire Station No. 5 (construction and Power Line Road property purchase for new station site)
- Performing Arts Center at Orange Beach High School
- Golf Cart Multimodal Path (East and West Canal Road) providing connectivity
- Mako Athletic Field House (former Utility Office) for Orange Beach Middle / High School
- Wildlife Center / Rehab / Maintenance Shop
- Orange Beach Sportsplex Baseball and Softball stadium and field upgrades for Orange Beach Middle / High School
- Orange Beach Sportsplex Football / Soccer Stadium Conversion
- Recreation Center Adult Fitness Gym construction
- Shooting / Practice Range for police training and public practice
- Kids Park Playground replacement
RESTORE PROJECTS (require some upfront expenditures but most costs will be reimbursed)
- Lower Perdido Sediment Study
- Sea Turtle Rehab Facility
- Alabama Point Seawall repairs and improvements
The final approval for the bond issuance will come back before the council in coming weeks.