City Beat: Council authorizes $8M bond sale

Last edited 1:18 p.m., July 24, 2014

Springfield City Council approved a plan to take advantage of a favorable bond market – a move that could save the city about $1 million in debt service payments through 2021.

At the July 7 meeting, council members unanimously passed the first of two related bills, allowing the city’s finance department to move forward with the sale of up to $8 million in general obligation sewer bonds. Springfield Finance Director Mary Mannix Decker said voters approved a portion of the bonds in 2005 for the extension of sanitary sewers throughout the city.

“We’ve been issuing installments of these bonds, as Clean Water Services finishes up the work and then moves on to another section,” Decker said before the vote. “Of the amount we are looking at – around $8 million – $3 million would be what we call new money, which would be used for the extension of the sewers.”

She said about $4.5 million of the proceeds would be used to refund older general obligation bonds from 2001 and 2003.

“Because we expect the interest rate will be lower, we will experience a savings on these bonds. We are not extending the terms,” Decker said.

“We are just taking advantage of the interest rate differential.”

Decker said interest rates on the existing bonds were around 4 percent. According to Bloomberg, 10-year municipal bonds were yielding 2.4 percent for investors on July 10 and 30-year bonds were garnering 3.5 percent.

The bill authorizes a competitive sale, and Decker estimated the move could save around $150,000 through 2021 on bonds that mature between 2019 and 2021. The companion bill, which received a first reading last week, formally issues the bonds that will stay open for bid until July 21, the day of the next council meeting.

Decker said council members would know the bond sale results and the set interest rates before the vote to issue the bonds. Decker said requests for bond bids would be advertised through The Daily Events legal publication.

No members of the public spoke to either bill.

Rezonings approved
Council unanimously approved three rezoning proposals at the July 7 meeting that green lights development projects on North National Avenue, West Grand Street and at the South Oaks Center on South Campbell Avenue.
 
Council approved a request by Wal-Mart Stores Inc. (NYSE: WMT) to rezone 1.2 acres at the northeast corner of the south-side shopping center to make way for a Murphy Oil USA convenience store and fueling station.

Wal-Mart sought the zoning change because the planned development did not allow for a gas station on the property, said Springfield Planning and Development Director Ralph Rognstad, who introduced the bill at the June 23 meeting.

The deal forwards a long-standing development relationship between Murphy Oil and Wal-Mart.

In December 2012, El Dorado, Ark.-based Murphy Oil Corp. (NYSE: MUR) announced it had reached an agreement with Wal-Mart to build 200 fueling stations at Wal-Mart Supercenter sites over the next three years. At the time, Springfield Business Journal reported the vast majority of Murphy gas stations – 1,013 of 1,160 – were operating in Wal-Mart parking lots.

Murphy Oil officials could not be reached by press time.

Council’s rezoning of 4.9 acres at 2420 and 2446 W. Grand St. strips the property of a general manufacturing use and allows Burrell Inc. to build apartments for low-income individuals and those with disabilities.

Developer representative Jane Earnhart of engineering firm Olsson Associates Inc. said the plan calls for fourplexes with a central parking lot, and construction should begin this fall. The property remains a low-density, multifamily residential district.

Earnhardt said Burrell is planning two buildings per acre for a total of 40 units, though she said the developers might build and fill the buildings one at a time. She said the first building could be done by next summer. Earnhart said she did not know the estimated investment, and no construction cost was provided to council.

In 2011, Burrell built a two-story, 14-unit complex for an estimated $1.4 million nearby at 2550 W. Catalpa St., according to SBJ archives.

Council also rezoned a roughly quarter-acre lot at the corner of National Avenue and Central Street, just east of Ozarks Technical Community College. The applicant, Chris Velez, plans to open a coffee shop with outdoor seating and a drive-thru.

“It’s a former service station. Most recently, it was used for shoe repair,” Rognstad told council at a June 23 public hearing. “The drive-thru and the outdoor seating require a change to a limited business [district] from a retail zoning district.”

During the bill’s public hearing, Stephanie Ireland of Ireland Architects Inc. represented Velez and his concept, called Refuel Your Coffee.

“It’s not been updated in about 30 years. If you’ve driven by, it’s quite dilapidated, but they want to keep or preserve as much as is structurally possible, and then do a small addition,” Ireland told council.

Following the bill’s approval, she said Velez wants to keep the gas station feel to the building, which should be around 1,000 square feet after an addition. She said the project cost has not yet been calculated as design plans were pending the rezoning.[[In-content Ad]]