The Sapulpa City Council conducted a study session at 5:30 p.m., at City Hall, to discuss the newly-passed GO Bonds and the 12-member oversight committee. This meeting was open to the public.
Jon Wolff, Finacial Advisor, from Municipal Finance Services, along with John Weidman, Bond attorney, from Hilborne and Weidman, apprised the council of the intricacies involved in issuing the bonds that were recently passed. Jon Wolff presented the bulk of the information to the council.
Wolff explained to the council that the $4,000,000 bond for economic development would be issued under a different part of the Oklahoma constitution from the other bonds. This means that separate bonds will be issued.
The entire $40,200,000 approved by voters could not be done in the first year to “maintain an 18 mil rate on the sinking fund millage.” This entire amount would have to be issued over a nine-year period. He apprised the council that $16,250,000 would be the maximum issued the first year.
Wolff said that 85% of the dollars “had to be out the door in three years.” The council had to pick projects that could be done “without hiccups,” in those three years. The maximum issuance of the first year would represent 40% of the total bonds approved. He said the council needs to close on the bonds by July 1, 2020, to place these bonds on this year’s tax rolls. The debt service scenario would be a 25-year term on the bonds. Wolff advised the council to take advantage of interest rates, especially long-term interest rates.
City Manager Joan Riley said that it would be a difficult process to decide which projects are done first. She said it would “come down to the taxes.” Vice-Mayor Martin asked how the potential for 200 new 1,500 square foot homes in the next five years would impact the evaluation of projects. Wolff responded that it would “help tremendously.” His calculations were based on a 2.5% growth in property tax valuation as the result of appreciation, not new properties on the tax rolls. If there was substantial growth over the next 8 years, the projects could be accelerated.
The Economic Development bond, by law, cannot go over 5 mils. He cautioned against waiting to issue the Economic Development bonds since it is harder to sell a long term bond for $4,000,000 versus $16,250,000. All of the GO bonds would be sold on the national market to get the best deal.
John Weidman, the Bond Attorney, explained that the Economic Development bond could not be used to give money to a company, without the bond becoming taxable. The other GO bonds are non-taxable. If there was an urgent economic development project, they could borrow the money or find money from another source and pay the money and possible interest back with the bond money. There was a robust discussion on how much of the $4,000,000 money for economic development should be issued the first year.
John Weidman fielded questions from the council members about the use of the economic development money for loans to companies or establishing a revolving fund for loans. There are statuary regulations that put restrictions on the funds, for example, the city could not use the loan proceeds to build a new city building.
The next topic of discussion for the study session is the formation of the 12-member GO Bond Oversight Committee. There will be one member picked by council members from each ward, two members picked at-large, two council members, one member from Sapulpa Schools, one member from the Chamber, one member from Main Street to be approved by the mayor and council.
Pete Egan, Chairman of the Sapulpa Parks Board, who was present at the meeting, said he would like to be on the committee since 40 % of the proposals were for parks. City Manager Joan Riley said she would like the applicants to say why being on the committee was important to them to better understand what their “purpose and feelings are about the issues.” Councilmember Carla Gunn said she wanted to see in writing, “their passion and why they want to be on the committee.” Vice-Mayor Martin said that Johnny Bilby from the School Board had been picked and was willing to be on the committee, as well as Suzanne Shirey from the Chamber, and Cindy Lawrence, from Main Street.
Both the City Manager and the City Attorney said that any interested party needed to fill out an application. The city manager told the audience if anyone in the room knows of anyone who wants to be on the committee, to call her. Widdoes said those who are interested can also apply online.