HIllsboro votes to refinance bonds for a potential $35,000 savings

On Tuesday, Sept. 7 the Hillsboro City Council heard from Greg Vahrenberg, managing director at Raymond James regarding refinancing bonds.

Vahrenberg explained that the low interest environment has made this an opportune time to refinance bonds as rates reach a record low level. He stated that the city has done this in the past with favorable results and would be wise to do it again.

He went on to discuss bonds between 2007 and 2011 that will mature in October of 2026 for a total of $935,000 principal outstanding.

“Those bonds have interest rates which average 2.99 percent with a final payment in five years. So a very short amount of bond and short amount of repayment period. If we are able to lock in the current interest rates, we should be able to take that interest down from 2.99 to somewhere close to 0.75 percent. So after we finish calculating the new interest rate and the cost of refinancing, the savings to the city we have identified is $35,403.” Vahrenberg said.

Council member Brent Driggers asked if there was any risk to the city. Vahrenberg explained that getting a lower rate would increase savings but if they were unable to it would stay the same.

“It’s not a huge amount of money, but it’s a pretty fair amount once you get down to the nuts and bolts of it,” said City Administrator Matt Stiles. “There really isn’t a downside to pursuing it.”

Mayor Lou Thurston said “There have certainly been significant advantages we have had in the past from refinancing and there certainly is no downside to this particular scenario. I would bend over and pick up $35,000 off the ground if I stumbled upon it.”

The council approved the authorization of the underwriting and sale of refunding bonds. Bids will be sought from banks by Raymond James and then presented and evaluated at the Oct. 5 meeting.

Pueblo Viejo submitted a request for a Cereal Malt Beverage (CMB) license to sell

beers.

“The restaurant, under previous owners had a CMB license that ended in 2019. After reviewing

an initial application, we denied it for failing to meet the statutory requirements on residency. The

owners have altered structure slightly and resubmitted. Based on our review we believe that the

application now meets the requirements,” said Stiles. “In discussing the issue with the

owners, they say that they have lost business not being able to serve beers with meals.

The council voted to approve the CMB license request for Pueblo Viejo.

Stiles explained that the City has completed a Housing Assessment Tool (HAT) and begun talking with developers about building new housing.

“The last new housing unit was a single family home on 3rd Street in 2019. As part of the discussion with the developers we have committed to making the process of building as smooth as possible. We have also discussed ways to lower the risk and barriers to entry for builders,” said Stiles.

One plan to help is Policy 92 which seeks lower the entry cost by waiving fees associated with building a new home or housing unit. These fees would include:

• Building permits and inspection fees

• Utility meter, tap, or system connection fees

• Fees associated any necessary application to the planning commission or board of zoning appeals

“In total that would be approximately $2,700 on a $200,000 project. The policy would only apply to housing units and not commercial non-housing projects,” said Stiles.

While not collecting these fees does cost the city since part of the utility fees are for new electric and water meters which are charged at cost, they will be able to recoup the cost of the meters over the course of the housing being there.

Stiles said, “The small upfront investment by the city will result in a housing unit that will hopefully be in use for 40+ years. The benefits of adding that housing unit should outweigh the initial lost revenue.”

He also suggested the city should consider joining in partnership with the Marion County Neighborhood Revitalization Plan, in addition to waving the fees, which would provide rebates of

property taxes on a sliding scale for the first five years after a property is built.

A formal proposal for that Neighborhood Revitalization Plan will be presented to the Council at a future meeting.

Stiles explained that the council will be asked to approve an application to the Kansas Housing Resource Corporation for grant funds to promote housing at the Sept. 21 meeting. More information will be provided at that meeting.

The vote was passed to implement Policy 92 and it went into effect immediately.

The council discussed the tragic accident with Ken Carlson on August 28 during which Carlson was mowing around a city pond when the mower tipped over into the water, trapping Carlson and causing him to drown.

“We have begun looking at the options to improve safety for mowing around the city ponds. There is little that can be done to completely eliminate risk, we can change how the areas around ponds are maintained. We’ve talked about doing some regrading and riprapping to reduce the slopes. In addition we can reduce the mowing directly around the pond edges by moving to low maintenance native grass and trees as a buffer,” said Stiles.

He said that the street department will “take over the areas that Carlson was mowing for the remainder of the season. They have looked at a sickle bar attachment or extendable boom that would allow the tractor to cut those areas without getting too close to them.”

In other news, the council:

n approved the 2022 budget

n approved the order of a 2022 Ford Police Interceptor at a cost of $32,511 from Hillsboro Ford.

n approved the city to no longer turn power back on after the 4 p.m. on a day that it is cut off. The full policy is available at the city office.

n approved a raise of $3 per hour for part-time officers for the Hillsboro Police Department.

n approved the creation of a new full-time position of Community Engagement Coordinator out of several part time positions. This role will be filled by Cara Duell (current Hillsboro Family Aquatic Center Manager) and will take over museum operations, continue managing the pool and also provide assistance with other engagement projects identified in the city’s proposed strategic plan. This will allow the museum to be better utilized as a community asset. Sue Wadkins will also serve as a museum

coordinator giving tours and doing operational things at the museum as well as working on

Convention and Visitor Bureau activities.

n approve the transfer of the property at 111 East 1st Street (the old post office) from the land bank to the City of Hillsboro. This will allow then for Tabor to occupy the building pending a lease agreement being reach provided they insure the property and city against liability and pay the utilities.

The City Attorney has drafted a lease-purchase agreement with Tabor that is currently being negotiated. The current terms are $500 per month rent for three years with back due rent paid at the

time of signing. That rent will be applied to a purchase price of $30,000 for the building along with the

remaining balance at the end of the term if Tabor chooses to purchase the property.

n approved the appointment of Nikki Jones to the Hillsboro Housing Authority and the appointment of Alvin Hett to the Hillsboro Library Board filling Jamie Driggers remaining term.

n learned that there has been a delay in moving the spray park project forward. The project is currently waiting on an installation cost. The equipment for the park has been in a holding pattern until the cost of installation can be confirmed and the committee verify that there are sufficient resources. They are also waiting on bathroom costs, but those are independent of the spray pad project.

n heard that the number of vendors for the Sept. 18 Annual Arts and Craft Fair is down from the 2019 number as the COVID resurgence continues to deter people, but the board is still anticipating a successful fair.

n learned that sales tax for August this year is 22 percent above August of 2020 and 32 percent above August of 2019.

More from Laura Fowler Paulus
Hands-on learning in Hillsboro
The Marion County Kansas National Guard recruiter, SSG McDonald, as a community...
Read More