The approval authorized the mayor and council to make arrangements with investment bankers from Merchant Capital. The council voted 4-1 in favor, with Councilman Ken Horn voting against.
The vote did not commit the city to issuing bonds. It only allowed the investment firm to begin the bond rating process, which would affect the interest rate received by the city. The council would then have the option of rejecting or accepting the proposal.
Both the council and the city Board of Education met with Reid Cavnar of Merchant Capital at recent meetings.
Cavnar explained the resolution at a May 19 called meeting with the council.
“This will take 30 to 60 days to get that paperwork done, get the rating in place, and then we will be in a position to come back to you for a final approval,” Cavnar said at the May 19 meeting. “Today you are not voting to move ahead and sell bonds. You are voting to let us get the paperwork started.”
At the May 19 meeting, Cavnar presented several financing options to the council. Under the proposal, bonds could be issued at a lower interest rate for the city than bonds sold in 2002.
Cavnar said the options could either reduce the amount owed by the city through a cut in the interest rate or lower the current monthly payments on the old bonds. Another option would allow the city to raise more than $2 million for general use.
The council tabled the action at Wednesday’s meeting. They also had the option to approve bonds to raise money for the high school. Cavnar spoke to the Board of Education at its May 11 meeting.
There, he said the bonds could be repaid using the ad valorem property tax collected by the city for school use. He said nearly $20 million could be raised, figuring a 1.5 percent annual increase in the money collected by the tax.
In other business Wednesday, the council approved David Dennis to be allowed to return to work for the Fire Department for a 12-hour period. Dennis drew workers’ compensation for more than two years after an injury.
Dennis was not granted disability retirement after being unemployed for two years. Councilman Walter Jacobson said the council’s decision gave him an opportunity to file.
The vote was 3-2 in favor, with Jacobson and council President Jim Heigl voting against. Jacobson made a motion to table the item to change some of the language in the resolution. After not receiving a second for the motion, Councilman Manuell Smith made a motion to amend the item to include the 12-hour period.
Jacobson spoke against the matter before voting. He said due process had taken place in this situation and the city was making an “exception” for someone that could cause “problems down the road.”
After the meeting, he discussed why he requested the action be held before setting a legal precedent.
“(Council members) had talked about some of the stipulations on how (Dennis) would be able to return to work,” Jacobson said. “There were certain limiting conditions, there was a timeline, and there were several conditions like that not included in what we just did.”
Also at the meeting, tax abatements were granted for IKO Shingles, for its new industrial plant scheduled to be built by late 2011. The council approved unanimously the standard abatements for non-education property, sales and construction-related taxes.
The resolution read by the city clerk stated the company would invest about $63 million into the plant and it would have a maximum capacity of 75 employees.
In other business:
• Tommy Dobson was reappointed to the airport board for a five-year term and Ruth Farr was reappointed to a five-year term with the Tree Commission. Both were approved unanimously.
• Amended annual contracts were approved for Industrial Development Board, Sylacauga Health Care Authority, Sylacauga Alliance for Family Enhancement and SAFE Transportation Program, Comer Museum, Boys Club, The Arc of South Talladega County, Animal Rescue Foundation, and Curtis and Son Funeral Home. The contracts covered fiscal year 2009-2010, ending Oct. 1.
• The council approved furniture from East Highland School to be classified as surplus property and authorized its disposal.
• The council authorized $54,498 for accounts payable received for May 2010.