City approves long-term debt program
BY BRADLEY "B.J." DAVIS, JR. Gulf Breeze News bjdavis@gulfbreezenews.com

Officials from the City of Gulf Breeze are developing a financing plan for the city's long-term debt obligations. Currently, the city has budgeted just over $7.5 million for capital improvement projects, payments on cash flow loans and grant matching. City staff recommends a bond issue.

"Before Hurricane Ivan, the city's undesignated cash reserve position was very strong at $6,453,166," said City Manager Edwin "Buz" Eddy in a memo to city council. "Our undesignated cash reserve position is now estimated at $2,012,463." Eddy explained that the situation would improve once FEMA reimburses the city for approximately $1.3 million spent on Hurricane Ivan damage repair costs.

"We have gotten ourselves into a situation where we need to do some financing to get us through this period of time before some of the FEMA money comes," Mayor Lane Gilchrist said. Gilchrist explained the city took advantage of several grants for improvements such as septic tank abatement and stormwater utility. The city, in turn, has to initially foot a majority of the bill and wait for reimbursement of the grant in addition to contributing to some projects.

One of the grants is the Community Development Block Grant (CBDG) for septic tank abatement on portions of Highpoint Drive and North Sunset Drive.

The summary of the proposed bond issue would be approximately $7,500,00.

The use of these funds includes:

$1,700,000 for ball field renovations/repair

$450,000 for a new fire truck

$3,000,000 for payments on a previous loan from SunTrust Bank

$747,000 to refinance the city's 1997A

$1,350,000 for matching grants

$258,000 for cost of issuance

Eddy explained that a $747,000 balloon payment for the 1997A loan is due in 2015, placing a burden on the city.

"Part of the proceeds of this bond issue will pay that off and include the repayment in a more linear amount each year," he said. That bond was used for projects such as the new fire station and road resurfacing.

Eddy stands behind the staff recommendation for approval of the bond.

"You will note in the review of these expenditures beyond budget that most position the city much better off for the future in terms of infrastructure," he said in the memo. Eddy noted that the estimated yearly payments for the debt will be between $550,000 to $600,000.