Baldwin City Council starts the process on $2.86 million bond sale, approves new transparency policy for debt
photo by: Elvyn Jones/Journal-World File Photo
The Baldwin City Council has started the process on a $2.86 million bond sale to pay for a variety of projects, and city leaders also approved a new policy requiring the city to clearly specify how such debt will be paid off.
At its Jan. 19 meeting, the City Council authorized the city to start working on the bond sale that will pay for the new police station on the city’s U.S. Highway 56 gateway, the downtown Sullivan Square park and sewer plant improvements. Temporary notes issued to pay for the police station and park will be rolled into the bond.
According to information provided by the city’s financial adviser, Baker Tilly Municipal Advisors LLC, the bonds will be bid Feb. 2, and the results of the sale will be presented at the City Council the same night for approval. The bonds, which will be slated for retirement in March 2040, are expected to have an interest rate of about 1.55%.
Also at the Jan. 19 meeting, the City Council approved an ordinance that requires the city to specifically identify funding sources that will be used to retire debt before approving any future bond sales.
Specifically, each time the council wants to approve a bond sale, the new rule requires the council to also pass a separate ordinance that identifies the funds that will be used to retire the debt. If any of those funds come from utility rate increases, the ordinance also allows future councils to rescind those increases once the bonds are paid off, if they so choose. The new policy will apply to the $2.86 million bond sale that the city is currently working on.
City counsel Blake Glover said that if future council members were to approve a bond issue without passing an accompanying ordinance identifying funding sources, they could be removed from office. He said the new requirement might be unique in Kansas — after researching the proposed measure with the Kansas League of Municipalities, he could find no other city in the state with a similar rule.
Mayor Casey Simoneau said the ordinance would provide an extra layer of transparency and a means of clearly informing residents of how bonds would be paid off. Council members Brian Cramer and Julie Constantinescu, however, characterized the measure as a needless extra layer of bureaucracy. The ordinance passed 3-2; Cramer and Constantinescu voted against the ordinance, and council members Scott Lauridsen, Susan Pitts and Cory Venable voted for it.