Sydney Cromwell
Homewood schools and parks loan
Mike Dunn of Stifel presents bond options to the finance committee.
The public will have the chance to share their thoughts on the city's proposal to take out a $110 million municipal bond to pay for a series of upgrades to Homewood schools and parks.
These upgrades include new playing fields at West Homewood Park, a pool and tennis courts at Patriot Park, the possible relocation of Homewood High School adjacent to West Homewood Park and the option to either upgrade all three elementary schools or add on a fifth grade wing at Homewood Middle School. Homewood City Schools Superintendent Bill Cleveland estimated the schools portion of the project would be in the range of $55 to 70 million, and Parks and Recreation Superintendent Berkley Squires said the parks renovations would cost about $35 million.
At an Oct. 17 finance committee meeting, broker Mike Dunn of Stifel public finance presented the city's options. He said that based on current interest rates and Homewood's AA credit rating, a 30-year loan at $110 million would cost the city about $6.2 million in annual debt service.
Dunn said Homewood can choose to refinance bonds that it took out in 2007 as of Dec. 1, which would save the city a gross $8 million over the term of the bond. The committee discussed a one-cent sales tax increase, which would generate about $7.6 million per year in new revenue to put toward the schools and parks capital projects.
Dunn said he would like for the city to take out the bond before Thanksgiving. Cleveland pointed out that the school system is still undergoing the strategic planning process and will not have a definite plan or price tag in that timeline. However, Dunn and city attorney Mike Kendrick said that would not impact the bond process.
“I don’t know that we have a set number to bring to you Mr. Jones at this point,” Cleveland said.
The public hearing will be part of the full city council meeting on Oct. 24.
The council will also make a final decision on an incentives package for Giani Respinto's Pizzeria GM proposal at 165 Oxmoor Road. Kendrick stated that there had been some misunderstanding about the nature of the incentives. The city is not taking out a loan for the proposal, which includes rebates on ad valorem tax for 10 years, rebates on business license fees for three years and 50 percent of sales tax generated on the property, except that allocated for schools, for 10 years.
The incentives are capped at $500,000 in total, but Kendrick said that if Pizzeria GM had $1 million in sales in a year, the total money returned to Respinto would be in the neighborhood of $15,000.
Ward 2 Representative Vance Moody said the incentive package was "really consistent" with offers they had discussed with other potential developers.
“I think what we’ve tried to get is the best name with the best chance to make it,” Moody said.
The council will take up both issues at its Oct. 24 meeting at 6 p.m.
