The city of Chillicothe formally entered into a lease purchase transaction to finance the development of Chilli Bay Water Park.
Representatives from bonding counsel Gilmore and Bell, as well as Stifel-Nicolaus, underwriter, met with city council members during their regular council meeting Monday evening, and reviewed the financing package before council members gave their nod of approval.
The project, which involves expanding and transforming the existing municipal aquatic center into a water park, involved issuing $4.2 million in tax-exempt, bank-qualified certificates of participation that will be paid for through the city's capital improvements sales tax fund.
Carl Ramey, with Stifel-Nicolaus, stated that he had been "astounded" by the great interest shown in the transaction earlier that day, which allowed the cost of borrowing money to drop to a true interest cost rate of 2.172 percent, with an all-inclusive interest cost of 2.4588 percent.
"Two percent interest in today's market is incredible," he stated.
The low rate was secured in part, he explained, because of the city's credit history, that the COP issuance is a bank-qualified transaction, and because of Stifel-Nicolaus' history.
Forty percent of the certificates were sold locally, with the rest being sold nationally. The wide distribution shows competition, Ramey said.
The total debt service will be $4,826,874. The first interest payment is to be made July 15, 2013, and the first principal payment to be made on Jan. 15, 2014. The certificates mature in 2023, but can be refinanced or paid off early without penalty.
Also Monday evening, council members approved the purchase of a new rescue tool system (also known as the Jaws for Life) for the Chillicothe Department of Emergency Services. The equipment, in the amount of $32,365, will come from Schuhmacher Fire Equipment Company. The jaws for life are hydraulic rescue tools used to assist vehicle extrication of crash victims. Chillicothe Fire Chief Darrell Wright stated that the new model has the core technology to work with newer vehicles. He also noted that the new model replaces one purchased in 1984 that needs a pump replaced, an expense that could cost around $10,000. He said that the ambulance district will reimburse the city for half of the cost.
In other business Monday evening, the council approved new rates for hangar rent at the municipal airport. The city most recently had a monthly rate structure of $50, $75, and $100. Council members approved a 20 percent increase by a 4-1 vote, with councilwoman Pam Jarding voting against the increase. City officials reviewed hangar rent prices at airports of nearby communities.
Also Monday, Mayor Chuck Haney presented Tim Riekena a plaque for his years of service with the Parks and Recreation Board. Riekena had served as the board's president, and had reached term limits.
A question was also raised about the status of a residential structure at 1002 Elm Street that received extensive damage due to a fire. Assistant Code Enforcement Officer Tammi Venneman told the council that the owner said that the roof will be replaced by the end of 2012. She said that if by early 2013 the roof is not replaced, the city would pursue legal action.