Council approves bond issuance

The Bella Vista City Council voted unanimously during a special meeting Tuesday, Sept. 2, to approve the issuance of $23 million in bonds for police and fire projects approved by voters earlier this year. The bonds are to be paid off with a 1% sales tax.

Daniel Allen, senior vice president with Raymond James, said the city received an AA- rating from Standard and Poors and was able to secure extremely favorable lending terms, working out to an effective 1.44% interest cost.

“The sale went well, I honestly couldn’t have been happier,” he said. “That’s not a typo, it is a 1.44%.”

Allen said he expects the city will pay off these bonds around 2031 at current sales tax revenue levels, though if the city sees growth in those revenues, these bonds could be paid as early as 2027.

While the city ultimately sold $23 million in bonds, there were orders for $41 million in these bonds, he explained.

“That means we went into the market at the appropriate levels,” he said.

Ryan Bowman with Friday, Eldredge & Clark, the legal firm the city has hired for bond counsel, said that US Bank will be the trustee and will hold onto bond funds, in addition to receiving the 1% sales tax in order to pay off the bonds.

The bank will create separate funds for police and fire projects. When the city has expenses related to these projects, the invoice will go to US Bank and the bank will pay these invoices with bond funds, he explained.

If the city pulls more than enough sales tax to pay, the bank can prepay, and any unused bond proceeds can also be applied to the balance, he added.

Because the rates were only available for one day, the city council needed to approve an emergency clause for the ordinance so the bond sale could be effective immediately, he added.

Council members voted unanimously to move the ordinance to a third and final reading, approve it and approve the emergency clause.

The council also voted unanimously in favor of accepting a $111,821.39 grant from the state, using federal funds, to provide covid-19 related hazard pay to first responders.

Mayor Peter Christie explained that this is in addition to emergency responders’ typical pay.

Fire Chief Steve Sims said that this is the exact amount the department needs after examining who was working during the eligible eight-week period.

The council also unanimously approved the acceptance of a 10% matching assistance fund from FEMA for covid-19 related supplies totaling $18,576.36.