BENTONVILLE -- The first infusion of bond cash will help the city stay ahead of continued growth, a city official said.
Bonds were sold the morning of June 22, and the city plans to close the deal July 29, said Kevin Faught, the city's bond adviser. The City Council later that day approved an ordinance issuing the bonds.
More than 100 purchasers bought the bonds, Faught said. Buyers included bond funds and multiple banks, he said. The city received an interest rate of 1.39% over the life of the bonds, he said.
Faught said many bond buyers would be normal in a package this big. In a low bond -- say just a few million dollars -- there could be just one buyer, he said.
Councilman Bill Burckart said he was happy to see the rate the city received as well as the regard shown by bond purchasers.
"The bonds were received really well; they sold out in 30 minutes," he said. "I am pleased with the bond offer and how it went. They believe in Northwest Arkansas, and they believe in Bentonville."
Wyman Morgan, city of Springdale director of administration and finance, has been a part of $709 million in bond sales in that city since 2004. He said the interest rate Bentonville received was a good one in the market right now.
"There are a lot of different pieces to the puzzle that get you to the end result," he said.
Voters on April 13 backed the city's $266 million bond plan for capital projects and bond refinancing by approving all nine questions on the special election ballot by at least 76%. The city will pay for the bonds by extending a 1-cent sales tax. The tax was approved in 2003 and extended in 2007.
Most of the bond money -- $173.5 million -- will go to street improvements, according to a city website dedicated to the bond issue.
Burckart noted more than 70% of the bond money will go toward infrastructure improvements such as roads and drainage.
"We have a lot of projects that are shelf-ready, that are in the conceptual or design phase," he said. "This keeps us ahead of the infrastructure needs, and we have to stay ahead of this. It takes many years to make a difference."
Southwest Bright Road and Southwest A Street projects and design for more than 15 additional street projects will be part of the first bond series, according to the city.
The council on June 22 also approved more than $2.3 million in drainage and street improvement projects associated with the April bond referendum voters approved.
A new radio system, training facilities for Fire and Police departments, the downtown Quilt of Parks, Phillips Park, design for the library and all 25 drainage projects will be paid for in the first bond, said Debbie Griffin, city community relations and economic development director.
Funds available will be approximately $99.5 million, which will provide about $73.5 million for new projects, $24 million to refinance current bonds outstanding and $3 million to establish a debt service reserve and pay issuance costs, Griffin said.
Councilman Octavio Sanchez said the projects will significantly improve life in the city
"Due in large part to new construction, drainage has become a serious problem in some areas, but it is being addressed in a very extensive manner to resolve those problems with a longer-term perspective," he said.
The city cannot close on the sale until 30 days after publication of the ordinance, which was scheduled for June 27. The city will close on the bonds July 29, Faught said.
Simmons Wealth Management, the bond trustee, will hold the money and the city will submit invoices to Simmons for payment, he said.
According to Internal Revenue Service regulations, at least 85% of the bond proceeds have to be spent within three years, Faught said.
The city will issue the bonds in three or four series, said Jake Harper, city financial director.
Web watch
To learn more about the Bentonville bond projects, visit www.bentonvillebond.com .
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