City of Homer officials last week signed bond documents to complete financing for the new Homer Police Station. It comes in at $900,000 less than the bond amount of $5 million that voters approved during a 2018 special election.
According to an April 26 city press release, on April 24, Mayor Ken Castner joined City Manager Katie Koester, Finance Director Elizabeth Walton and City Clerk Melissa Jacobsen to sign final bond documentation.
That secured $4.1 million in debt funds to complete the financing needed to build the new police station.
Last week’s signing ended a 5-year effort to secure finance and start construction on a police station to replace the old, 1980s era aging structure.
In a June 2018 Special Election, voters approved Proposition 1, a means to finance building a $7.5 million new police station building at the corner of Heath and Grubstake. Voters authorized the city to issue up to $5 million in general obligation bonds and approved a year-round 0.35 percent increase in the city sales tax to pay the bond debt. Once the debt is paid, 0.3 percent of the tax goes away, leaving 0.05 percent to cover building maintenance and repairs.
The bonding at $4.1 million comes in under the previously authorized $5 million amount due to the transfer of 2017 budget surplus funds to the police station project and financing mechanism through the Bond Bank.
“Through the Bond Bank, our project is bundled with other projects using the State of Alaska credit to issue a $20 million bond, which creates economies of scale and saves us on cost of issuance,” Koester said in the press release. “Highly rated bonds are more attractive and more competitive in the market and thereby help lower interest costs.”
While it is difficult to predict exactly when the 0.3 percent dedicated sales tax will end, according to the press release, but the lowered bonding amount allowed the city to lower the bond time from 20 years to 15 years.
“These actions embody City Council’s commitment of fiscal responsibility to citizens, while also insuring the essential infrastructure and quality services expected of city government,” Koester said.