City gets excellent rating for potential bond issue
by Matt Quillen
Oct 06, 2010 | 1998 views |  0 comments | 9 9 recommendations | email to a friend | print
Mayor Sam Wright announced the city of Sylacauga received an A+ rating for potential municipal bond issues at the regular council meeting Wednesday.

Wright said Reid Cavnar, an investment banker with Merchant Capital, recently informed him of the grade. Cavnar began the bond rating process on behalf of the city and the Sylacauga City Schools Board of Education.

Wright read from Cavnar’s e-mail which stated, “This is an excellent rating and indicates the city is well-managed.”

After the meeting, Wright expressed concerns about the repayment of the school bond issue using money from the ad valorem property tax fund earmarked for school use. But he also said he was “cautiously optimistic” the money would be there for the payments.

“I still have some reservation if they need all that (funding) now, or will they need it in the future,” Wright said. “When you are talking about $23 million, $4-5 million does not sound like that much. But could they have gotten by with $4 million less than this full amount to do what they want to do?”

The council has discussed a bond issue in recent weeks to borrow $23 million for the schools system and a refinance of 2002 bonds that would borrow an additional $2 million for the city. The school board stated they planned to use the funds for additions and renovations at Sylacauga High School and other school buildings.

Council members said the $2 million could be used to pay off the city’s Avondale property and earmark the remaining amount for specific use. Cavnar previously told the council the rating would affect the interest rate on the bond issuance.

Both matters required final approval from the council before bonds could be issued. City Clerk Patricia Carden said after the meeting the council could have the issue for the schools system and the city on the Oct. 19 meeting’s agenda.

Also at the meeting, the council voted 3-1 to approve contracts for several local organizations receiving city funds. Councilman Ken Horn voted against and Councilman Manuell Smith abstained.

The list included service contracts with The Arc of South Talladega County, Animal Rescue Foundation, Boys Club, Chamber of Commerce and Sylacauga Alliance for Family Enhancement.

Horn said he voted against the approval because he believed some of the organizations did not get enough funding.

“Some of them did not and I voted against the (city) budget for that reason,” he said. “The schools did not get enough money either, and the Boys Club was another.”

In other business the council:

• Approved nuisance abatement for property at 1415 Fairmont Road, 5-0.

• Approved the annual building lease with the Animal Rescue Foundation, 5-0.

• Appointed Harry Brown, Sr., Donna Dickey and Amy Price to three-year terms on the B.B. Comer Library Board, 5-0.

• Appointed Gary Smith to a six-year term on the Industrial Development Board, 5-0.

• Appointed Barrie Hamilton to a six-year term on the Cheaha Mental Health Board, 5-0.

• Approved the request for Police Officer Dallas Davenport to take leave without pay as needed while he campaigned for Talladega County sheriff, after his paid leave has been exhausted, 5-0.

• Approved expenses for Horn and Smith to attend the Alabama League of Municipalities convention April 30-May 3 in Huntsville, 5-0.

• Authorized payments of $106,548 for accounts payable invoices for September, 5-0.