The Summerville Town Council on Oct. 9 approved second and final reading of an ordinance authorizing the issuance of up to $47,500,000 in installment-purchase revenue bonds to finance the design, construction, equipping and furnishing of a municipal public safety complex.

Bond counsel Theodore DuBose of Hansworth, Sinclair & Boyd told the council the bonds are being issued by a newly created nonprofit entity and are not general obligation debt of the town. “These are not general obligations of the town. They are not bonds of the town,” DuBose said. He advised the council to approve several amendments before the second reading to add an emergency dispatch function to the facility and to name the nonprofit’s directors.

The council approved the amendments, which add emergency dispatch to the list of permitted uses, clarify that town council consent is required for any assignment by the nonprofit, and name Scott Slatten (ex officio as town administrator), Rita Berry and Montez Aiken as the three directors of the Summerville Municipal Facilities Corporation. After the amendments were adopted, the council approved second and final reading of the ordinance.

Council member Johnson Wilson questioned financing details, asking, “Bonds are not general obligation debt. Correct?” DuBose replied that the IRS interpretation treats these as issued by the corporation rather than the town. Johnson Wilson also asked about debt-service structure and a reserve fund; DuBose said there is not a debt service reserve fund for this financing and that establishing one would be a conversation for the underwriter. The transcript records Johnson Wilson saying she would vote no because “the debt is substantial” and she is concerned about the absence of a reserve fund.

Council discussion included estimates of the semiannual appropriation payments for the lease-like structure: council members were told payments would be “somewhere between 3,000,000 and 3,700,000” initially and would decrease after 15 years to “more like a million and a half,” according to DuBose. Town staff and consultants also told the council there are multiple revenue sources the town may use for annual appropriations, including general fund revenues, license and tax receipts, tax increment financing (TIF) revenues and impact fees; the council retains discretion annually on how to appropriate funds.

Mayor Russ Touchberry said the project is being pursued without a planned tax increase tied to the bonds, but staff clarified the council cannot bind future councils from raising taxes under state law. The motion to approve second reading passed; the transcript records a single recorded dissent by Council Member Johnson Wilson and otherwise voice approval.

The ordinance also authorizes lease, loan and trust agreements among the town, the Summerville Municipal Facilities Corporation and trustee and underwriter entities; bond counsel said those documents and related instruments will be executed as part of the financing.

The council asked staff and the town’s financial adviser to continue work on financing details for the bond closing and to provide additional information about debt-service structuring as the project moves forward.