A resolution going before the Kenai Peninsula Borough Assembly on Tuesday would authorize the sale of general obligation bonds totaling $2.5 million, the proceeds of which would be used to build and equip a new fire station in Kasilof and renovate another in Funny River.
Last fall, a majority of borough voters approved issuing the service area general obligation bonds. An affirmative vote Tuesday would authorize Mayor John Williams’ administration to execute the bond sale.
Finance Director Craig Chapman said the resolution would limit the term of the bonds to 20 years at an interest rate not to exceed 6 percent.
“Based on current interest rates for tax-exempt municipal debt, it is anticipated that the true interest rate of the bonds will be 4.5 and 5 percent. The actual rate of interest is subject to market conditions as of the actual sale date,” he told the assembly in a March 23 memo.
Retiring the proposed indebtedness will cost Central Emergency Service Area taxpayers $15 a year for each $100,000 worth of taxable real property. Voter approval of 2005’s Proposition 2 authorized the tax.
Chapman said he expects the bond sale to be held sometime in May, presuming the assembly authorizes it through the resolution. About $50,000 already exists in the borough budget for producing preliminary schematic drawings for the fire station projects. Those are being prepared now, he said.
The proceeds from the bond sale would have to be in the bank and available to the assembly before any actual design contract could be awarded, he said.
Mayor Williams said Wednesday the borough expects to seek bids from contractors as soon as the money becomes available.
In 2004, voters approved expanding fire protection and emergency medical services to include Funny River and the Kasilof-Cohoe-Clam Gulch areas. Building a station in Kasilof would reduce emergency response times, and renovations of the existing Funny River station would include new facilities for staff, which also would reduce response times.
The measure is Resolution 2006-031.
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