Sarah Fay Campbell / The Newnan Times-Herald
Bill Camp of Raymond James speaks to the Senoia City Council about the bond sale.
The city of Senoia has had a successful sale of bonds to refinance existing debt, and the city is moving forward with creating its own public facilities authority to fund future projects.
The city is issuing $5.2 million in bonds to pay off existing bond debt. Because the new bonds are at a lower rate, the city will save $881,000 over the 20-year term of the bonds. The bond sale was held last week, and will close Jan. 27.
These bonds are revenue bonds, which will be paid for with revenues from the city’s water and sewer utility.
By creating a public facilities authority, the city will be able to use bond funding for future projects that aren’t revenue producing, such as a potential new municipal complex.
At a called meeting, the council voted to approve a bond resolution, as well as approve forming the City of Senoia Building and Facilities Authority.
The council approved a resolution to ask for “local legislation” in the Georgia General Assembly to create the authority. State Sen. Matt Brass and State Rep. Josh Bonner will carry the legislation for the city.
Coweta County created its own public facilities authority in 2021. That authority can issue bonds for not only county projects, but also projects for the county’s municipalities.
But Senoia decided to create its own authority rather than using the Coweta Public Facilities Authority.
“We kind of want to do our own thing,” said City Attorney Drew Whalen. “The county did talk to us, and made an offer. We felt like we’d rather do it ourselves.”
The legislation creating the new authority should be in effect by July 1 at the latest. “Then we can explore the possibilities of financing,” Whalen said. And by that time, Whalen said, the city will hopefully have a solid idea of what projects it wants to pursue.
The city had a successful day in the bond market, said Bill Camp of Raymond James. “This is the first week we’ve seen any bond issues in the state for 2022, so you don’t have any competition,” Camp told the council. Rates have started to go up, so Camp said he was very glad the bonds were priced when they were.
With costs added in, the interest rate on the bonds will be 2.64 percent. The debt that is being refinanced is at over 4 percent, Camp said.
While the savings over the life of the bonds is $881,000, the “net present value” is $818,000. Using that, the savings from the refunding is around 17 percent.
“We normally tell folks that 3 percent of savings is a good refunding,” Camp said.
Camp said they are also purchasing a surety policy that insures the bonds as well as the required reserve. That means that the city’s reserve of $552,000 in the water and sewer fund can be used for other projects.
Whalen said the recommendation is for the city to hold onto that money for the time being, and see how the Keg Creek sewer treatment plant project goes.
“Sewer projects are notorious for cost overruns,” he said. “We may need it down the road.”
