In a move that could save Westminster more than $120,000, the city will refinance a 20-year bond issued 10 years ago from the state Community Development Administration but is also considering taking on an additional $2 million bond to finance projects at several city facilities.
In 2002, the city applied for the bond for around $2.56 million to finance the construction of the Longwell Parking Garage, according to outgoing city Finance Director Gary Ehlers.
The city is eligible to refund the bond at the 10-year mark, which will save the city the money by refunding the bond at around $1.572 million, Ehlers said.
The Mayor and Common Council voted to approve the refinancing of the CDA Infrastructure bond at Monday's meeting.
In examining the refund, Ehlers also suggested the city apply for an additional $2 million from CDA to finance various capital improvement projects.
The CDA is the financing sector of the state Department of Housing and Community Development. The administration issues bonds to local municipalities and then loans the proceeds, according to CDA representative Charlie Day.
Day and Ehlers presented the council with the idea at the meeting.
"When looking at this we also realized that we had an opportunity to add to our debt service a little bit and finance some of the capital projects for facilities along the way," Ehlers told the council.
Projects the city has on its radar to complete with the money include work at the street department facility, the Armory building and City Hall, all of which are in the city's capital improvement plan through 2018, Ehlers said.
The street department facility needs to be painted, the roof needs work and the city wants to implement a solar electric system to help defray electric costs, Ehlers said.
The city is also looking to replace windows, ceilings and have a geothermal solar system installed at the Armory building. The projects at City Hall include repainting the building and redoing the interior, according to Ehlers.
"The staff pulled this information together as part of what we had discussed as the capital projects, knowing that some of these capital projects would in turn down the road have been done using capital funding from our own resources, and some of them would've been done in small little chunks," Mayor Kevin Utz told the council Monday. "This was displayed for you to give you an idea that we can get projects done in whole instead of in part."
The bond would be pooled financing and include bonds for Mount Airy, Cumberland, St. Mary's and Hyattsville. The application is due to the state Friday.
The council was in agreement on refinancing the $1.5 million bond, but left the discussion on the additional $2 million on the table.
Councilman Robert Wack said the approval Monday to submit the application doesn't commit them to the $2 million bond. The council will have until mid-October to decide if it wants to borrow any additional funds, he said.
Councilman Dennis Frazier called the refund of the original bond a no-brainer, but said he wants more time for the council to discuss the specific projects outlined for the $2 million.
"I don't want to feel pushed into making a decision," Frazier said. "I prefer to push off the other $2 million until we look at this closer."
Councilman Tony Chiavacci also expressed some reservations on borrowing the money.
"I'm not sure we're quite ready yet to take on an additional $2 million in debt until we have a little bit better picture where the future lies in the next six months," Chiavacci said. "This is the first we're seeing it and I'm just not ready to jump at $2 million without some consideration and maybe a little bit better foresight of where we're going to be into next year."
Council President Damian Halstad said the council must decide if it wants to take advantage of the cheap money now, or pay-as-they-go for the projects.
The council left off Monday with the agreement to submit the application and that it would make decisions on the specific projects and amount of money it wants to borrow during the upcoming council meetings.