The Dumas City Council held a Public Meeting at City Hall to approve two ordinances and one resolution Wednesday, April 21, 2021.
Council member Jared May opened the meeting in prayer followed by the Pledge of Allegiance.
The council voted to pass Resolution 1396 to authorize the Mayor to sign documents relating directly to the Winchester project on behalf of the city. Whereas the City of Dumas previously approved the construction of a sewer line to connect to the City of Winchester sewer system and has approved financial loans through Arkansas National Resources Commission. The motion passed and seconded with all approved and two absent.
The council voted on Ordinances 964 and 965. -Ryan Bowman, of the Friday, Eldridge and Clark Law firm., announced and provided information concerning the ordinances. Jason Holsclaw, of Stephens, explained the financial savings that will be achieved with the passing of Ordinance No. 964 Mayor opened public hearing to comments concerning the bond issue. Bond 964 will be a bond refunding some bond the city issued in 2015.
The Ordinance covers two bonds issued to the Arkansas National Resources Commission and Arkansas Department of Finance Authority. The improvements the bonds refer to are the Winchester project to connect to the Winchester Sewer system to start processing their waste for their citizens and to have some additional improvements here to process that additional waste. All the improvements will be owned by the City of Dumas.
There are two bonds that are being considered is the Series 2021B which is $975,000 loan will be repaid over a 21 year term. The city will start making principal payments on April 15, 2023 and pay that amount through October 15, 2042.
Series 2021C is $3 million and will have principal forgiveness as the city advances funds toward the project then the ANRC will forgive that. So in essence it becomes a grant the city will not have to repay as the city's engineer is working with them to make sure the city complies with the federal conditions required by the ANRC.
“There is just shy of two years of interest only payments while the city is disbursing the amount. So unlike your other bond issues you have done in the past it's a draw down, so you will only draw as you need money for your project. And you will only pay interest as you pay interest as you draw down. So you won't start paying interest on the full amount of the $975,000 immediately,” Bowman said.”The bond is subject to redemption; you can repay it with no penalty after Oct. 15, 2031.”
Series 2021B and 2021C will have an interest rate of 0.75 percent and the city also has to pay a 1 percent servicing fee. The overall borrowing cost for the city on this loan is 1.75 percent. Bond Series. 2021 B&C will be purchased by state agencies. The Arkansas Development Finance authority is the purchaser of B&C. It is administered by ANRC. The entity purchases the bond and you'll make the payment every six months to the ADFA.
Series 2021 B and 2021C will close sometime later in June depending when ANRC is ready to close and they have the requirements they need to close. B does not have an emergency clause and the mayor is required to sign something in connection with Series 2021A. A public Hearing is only required for the bond issue on the Winchester improvements and the improvements here the sewer system in Dumas. The meeting was announced on April 7 to give notice to citizens of Dumas to give them the opportunity to give comments for or against the bond issue with ARNC.
Mayor Flora Simon gave a progress report on the project saying they are now closing date June for contracts for the project and all Of the documents needed to move forward with the project. They also have the final agreement with Pickens for their area of the project.
“Once we sign the loan then the contract the actual work begins,” Mayor Simon said.
The ordinance received a motion for approval was second and all approved.
Bowman Read Title of 965 A motion was made to suspend second reading of 965 and read by title only and it was seconded. The motion was approved. A second motion was made to approve 965. It was seconded and approved.
Ordinance No. 964 will refinance the 2015 Bond issue (Series 2021A) with a closing date of June 2. The bond will be purchased by Merchant & Farmers bank. m It will lower the city's interest rate from 3.68 percent to 2 percent through the Merchant & Farmers Bank. Holsclaw said as a result the city will realize a savings or a cash flow of just over $100,000. All we are doing here is lowering your interest rate and we are not shortening or lengthening your repayment term and we are going to be able to secure that lower rate.
“We are scheduled to close this transaction if you approve this tonight in the first of June and the city will be paying a lower interest rate. On average it is about $10,000 a year less than what the city is currently paying out until 2035. All we are proposing this evening is lowering the 2015 bond issue to save the city some money.,” Holsclaw said.
A motion was made to suspend the rules and read Ordinance 964 by title only. A motion was made and approved and all approved. With 1 council member abstaining and one absent.
After being read by title only, a motion was made to adopt Ordinance No. 964 and seconded. All Approved with 1 abstain and 1 absent.
Bowman asked the council to vote on a separate motion for the adoption of an emergency clause in Section 35 of 964. A motion was made to approve the clause and seconded. All approved with 1 abstain and 1 absent.
