The Effingham City Council approved the issuance of 9.5-million dollars in general obligation bonds to pay for the construction of a new police station Tuesday night. The city will use sales taxes over a 20-year period to pay off the debt from the bonds.
City Administrator Jim Arndt said that the city selling bonds was giving people a chance to invest in Effingham. “We will actually sell bonds through an underwriter [Bernardi Securities], ” Arndt said. “Which basically turns into an investment for people who want to buy into the City of Effingham to support us in our quest for a Police Department,” he continued. Investors will make money on the bonds through interest that city will pay. The expected rate is set to fall around 3.5-4% once the bond sale happens this January. However the the city could save money, according to Arndt, if it can improve its AA-minus credit rating to a AA. The improved credit rating would “reduce the amount of basis points which would save the city thousands of dollars in the 20-year term of the loan,” Arndt pointed out. Lower basis points would save the city money because they would determine a smaller return for bond investors.
Arndt said that the new police station is in the second, or design, phase currently. This spring, the city will be relocating the police department into City Hall, with demolition of the old police station set for May or June. That puts the groundbreaking for the new police station in late June or early July. Construction is expected to take around 13 months. FGM Architects is heading the design process.
City Administrator Jim Arndt discusses bonds.
In other action, the City Council approved the renewal of the 2017 Propterty/Casualty and Workers’ Compensation insurance policies. The city’s rate increased around 12% this year due to various factors, such as the city hiring additional police officers and adding new vehicles to its fleet. The increase represents a $42,520 increase over last year.
Hampton Inn and Suites owner Richard Beatty attended the Tuesday’s meeting to discuss the possibility of acquiring a liquor licence to allow a bar in the hotel. Beatty says that modern hotel customers expect to be able to get a cocktail and be entertained. He maintained that the bar would only be a small part of his overall business. Mayor Jeff Bloemker said that he “looked forward” to returning to the subject at the next city council meeting later in the month.