City explores bond options: Soldotna considers best method to finance library expansion

Posted: Sunday, October 17, 2010

As the Soldotna City Council bid farewell to two of its outgoing members at its meeting Wednesday night it also welcomed the beginning of its library expansion process.

The council unanimously passed a resolution designating the City of Soldotna as an economic recovery zone for the purpose of issuing recovery zone economic development bonds to finance part of the Joyce K. Carver Public Library's new design and construction.

"It's necessary to pass this if we want to use economic recovery bonds for construction of the library," said Larry Semmens, Soldotna city manager.

The bonds, also known as "stimulus bonds" because they were part of the federal stimulus program, offer a 45 percent interest subsidy from the government.

Semmens explained that a combination of bonds would be used to make up the $2.5 million in general obligation bonds voters overwhelmingly approved to be issued by the city of Soldotna in the Oct. 5 election.

"There's really three types of bonds available and will be used in the library funding scheme," he said.

There are tax-exempt bonds, stimulus bonds and Build America Bonds, Semmens said, and all of those will be considered.

He said the library expansion project is estimated to cost some $6 million altogether and Soldotna will be seeking other funding sources for the amount not paid with bonds.

The resolution authorizing the city to issue bonds also delegates authority to the city manager to decide which bonds to use.

"All the details of a bond sale are not available until the time of the sale," Semmens said, so this caveat of the resolution will allow him to analyze different variables and try to make the best call for the city.

Semmens said he is currently recommending a 20-year debt-service schedule for the bond issue.

Soldotna Mayor Peter Micciche said because the city has no debt it's pursuing the stimulus bonds to spread out the cost of the library expansion over generations.

"So today's taxpayers are not paying all of it," he said.

The City of Kenai utilized these type of bonds to fund the Kenai Community Library expansion this year.

Semmens said the city will begin the planning and design next year in hopes of breaking ground on the expansion in 2012.

Wednesday's meeting was the last one for outgoing council members Ed Sleater and Peggy Mullen, who said goodbyes to their colleagues.

"We accomplished something neither Dick Nixon or Sarah Palin did--we finished our terms," Sleater said.

The newly elected council members Kyle Fisher and Regina Daniels will be sworn in at the Oct. 27 meeting.

In other council action:

* Council introduced an ordinance to amend Soldotna's zoning code to protect commercial zoning districts, and only allow residential dwellings within these districts as an accessory or conditional use rather than a principal one. The public hearing for this code-change is set for the Oct. 27 council meeting.

* Council passed a resolution certifying the results of the Oct. 5 election with Regina Daniels elected to council seat E with 337 votes and Kyle Fisher elected to council seat D with 481 votes. Proposition No. 1 on allowing the city to issue bonds for the library expansion passed with 446 votes.

Brielle Schaeffer can be reached at brielle.schaeffer@peninsulaclarion.com.



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