The city of Brookhaven will issue a $15 million bond to pay for transportation and other capital improvement projects.
The general obligation bond issuance, approved by the City Council March 24, will speed up projects and “add some economic stimulus to the city of Brookhaven,” said Steven Chapman, the assistant city manager and chief financial officer.
A wide variety of projects are in the Capital Improvement Fund that the bond money will go toward, ranging from paving to another piece of the Peachtree Creek Greenway to intersection reconstructions to a new City Hall.
The bond is intended to be covered by money from a 2017 special local option sales tax, with revenues estimated at $47 million. Voters approved issuing bonds up to $34,295,000 against those revenues.
The city in 2018 issued $12 million in bonds from SPLOST revenue to pay for a new public safety and municipal court building. The new issuance brings the total to $27 million.
The economic impact of the coronavirus pandemic has pros and potential cons in issuing bonds. The interest rate will be about 0.82% due to the current market. “It’s about as cheap as you can possibly get this,” Chapman said.
On the other, tax collections may be lower as well, Chapman said. One reason for the plan to cap bond issuances from the SPLOST at $34 million was to leave a cushion in case tax collections were lower than projects “for an event possibly like we’re going through now,” Chapman said.
City spokesperson Burke Brennan was unable to provide the current amount of SPLOST revenue collected so far, but said that “we are still on track to meet the $47 million projection.”
Asked by City Councilmember Joe Gebbia whether the bond puts the city’s general fund at risk, Chapman said no.
The bond will be issued through Regions Bank, which had the lowest interest rate of seven bidders. The closing cost is $6,500.