Questions regarding the $10.5 M bond

Earlier today, I sent an email to the Mayor to get some additional questions answered regarding the once again increased $10.5 M bond.  During the public hearing, time to get these answers was limited and some information was not available.

Hello, Mr. Mayor.  Per your suggestion at the meeting last night, I am submitting these additional questions that I was unable to get answers to during the time you allotted me. 

What existing debt items are not being refinanced into this $10.5 M bond?

What is the approximate balance of that remaining debt not being refinanced, including interest?

In addition to the approximate $702 K annual payment on the proposed $10.5 bond, what additional annual payments will be required on the remaining debt service not being included in this refinance?

What is the approximate total debt figuring in the remaining debt not being refinanced, plus the new $10.5 million bond debt plus interest?

Are there any restrictions on the use of these funds to pay off the impact fee monies, plus penalties, owed to the county, similarly like were stipulated in the proposed BB&T deal that fell through last year?

Regarding the impact fee money owed to the county, what is the current amount owed, including penalties, if any? The paper has printed some information on this issue that implies there may be more money due now, due to some penalties on top of the roughly $500 K that was originally owed. Is this correct? If so what are the terms the county is now requesting?

Thank you in advance for your timely response to my inquiries.

Sincerely,
Lisa B. Shifflett

In addition to these questions, I did get answers during the meeting for the following questions:

I was able to confirm, through Pam Lawson, that this newly raised $10.5 M bond will be subject to a standard amortization schedule, without any special terms.   So the information I had calculated on my previous blog post was correct.  With a 30 yr term at 5.25% will result in over $10.5 M in INTEREST ALONE, and will end up costing the tax payers over $21 Million over the term of the loan, plus another $267 K in insurance which enabled the interest rate to be lowered from 5.8% and improved the bond rating from an A- to a AA, 4 steps higher on the bond rating scale than what it would have been.  Based on the council's response to this information, it was unclear if they had previously done the math and already knew how much this was really costing us or if they were merely trying to keep their poker faces.  Despite the fact that this bond will more than double the city's debt in one fail swoop didn't seem to bother the Mayor, Vice Mayor, or Councilman Blethen in the slightest.  Sad.

What is the current annual payment on the existing $11.something Million debt?  

Approximately $821K   

Mr. Cloud took this opportunity to reinforce the fact that the city would be "saving" money by doing this bond refinance when compared to the $702 K that will be the annual payment on the new $10.5 M bond deal.  Mr. Cloud neglected to mention how much additional money would also be due annually on remaining debt that was not being included in this refinance to have a true comparison.  Hopefully, the questions I sent the Mayor will give us a more accurate figure.

Polk City Panel Moves Bond Issue Increase Proposal Ahead

Polk City Panel Moves Bond Issue Increase Proposal Ahead

Ledger Article "Polk City Council Will Consider Adding To Bond Issue"

The latest Ledger article regarding the details of the bond to be discussed at tonight's emergency meeting at 6:00 PM  Polk City Council Will Consider Adding To Bond Issue

With these new principle bond amounts going up, higher interest rates, and new insurance fees the total amortized debt will be so much larger than initially anticipated.  For a principle bond amount of $10.5 M for 30 years with one payment per year at a rate of 5.25% the annual payment now comes out to $702,627.80, with the total INTEREST ONLY paid totaling up to $10,578,834.06.

Yes, you are reading this correctly, the interest total will be more than the principle total of the bond. When you add the interest only back to the principle bond amount, you are now looking at a TOTAL DEBT of $21,769,716.27!! 

Add the insurance of $267,000 on top. Based on how it is mentioned in the article, I don’t know how that is being figured into the amount and if that is also incurring interest. If that is just tacked on top without interest that will bring the grand total to $21,345,834.06. So much for the $9 or $11 something Million we have in debt now.  There may also still be existing debt that is not being rolled into this new bond that is not even being figured into this new debt balance!

If we are currently paying something in the neighborhood of $700,000 annually in principle and interest on the existing debt, how again was this plan supposed to reduce the annual loan payments to make the debt easier for us to swallow by spreading it out over a longer period of time?  I think that initial goal has somehow gotten lost in the determination of the Interim City Attorney and the City Officials being so hell bent on getting this bond passed, come hell or high water.  At this rate, the residents will never see lowered millage rates and water & sewer rates for generations to come!

Another Last Minute Special City Meeting Tonight 7/27 @ 6 PM

Special City Meeting Agenda for tonight July 27, 2011 @ 6 PM

At the last Emergency Special city meeting on July 14, city officials upped the bond amount to $10M, now they are asking for $10.5 M!!!  We started this whole process at $8.something Million.  Where is this nightmare going to stop???!!  By the time interest is compounded onto all this additional debt, even when spread over 30 years, how in the world is this going to be saving the taxpayers anything?!  We cannot afford this!

July 14th Special Meeting Summary

The Special City Meeting on July 14th at 6:00 PM, announced with one day notice, was called to extend the time frame to close on the contract to purchase the Cardinal Hill property on which the Cardinal Hill Temporary Waste Water Treatment Facility is located.  Council members Nancy Adorno and Don Kimsey did not attend the meeting.

Due to the additional time it has taken to rate the now $10,000,000 bond, the bond has not been finalized yet.  Without the money from the bond, the city doesn't have the money to close on the purchase of the Cardinal Hill property yet.  Originally, the property lease required a dormancy period for the plant due to begin no later than August 1st, 2011.  This will be the 3rd extension of the dormancy period.  This extension requires the city to pay a $25,000 deposit.  The 2nd extension of the dormancy period was approved by city council at the February 14th, 2011, city meeting.  A monthly rent of $5,000 per month has been being paid to the property owner, and will continue to be paid until the property is purchased or a new agreement is reached.  The impact fee credits originally worked into the original lease as payment will be satisfied by calculating a cash value equivalency, roughly $300,000 total, which has been worked into the purchase price.  This credit equivalency is at least part of the reason why the proposed purchase price of $825,000 for the 39 acre parcel of property seems so extremely inflated over the Polk County Property Appraiser's current valuation of roughly $70,000.  Here is a link to this parcel on the Property Appraiser's web site: Cardinal Hill Property - Parcel ID 252630000000021030   This new extension will move the closing date on the property to no later than November 1st, 2011.  Mr. Cloud stated that he expected the bond to close sometime in August, so the November extension should be plenty of time to close the property deal after the bond closes.  The vote to approve the extension was passed with a 3-0 vote.

Here is the Ledger article about last night's meeting: Council Approves Land Deal Extension For Polk City

Special Meeting Called for July 14th @ 6 PM

July 14, 2011 Special Meeting Agenda 

The meeting is scheduled for 6:00 PM to discuss authorization to extend the Cardinal Hill Contract.

MOUNT OLIVE WWTF Type II Facility Permit Application

  

Florida Department of

Environmental Protection

Bob Martinez Center
2600 Blair Stone Road
Tallahassee, Florida 32399-2400 

Rick Scott

Governor

Jennifer Carroll
Lt. Governor

Herschel T. Vinyard Jr.

Secretary

Permitting Application Subscription Service 

Following are the permit applications which match your subscription requests:

Permit: Water - Domestic Wastewater Type II Facility Permit Project name: MOUNT OLIVE WWTF Location id: FLA012952 Location name: Mount Olive WWTF Address: Not available County: Polk Application number: FLA012952-005 For further information, please contact the Southwest District permitting office in Temple Terrace at (813)632-7600