South Fulton authority OKs $96.285 million bond; bank funds deal without removing millage cap

The Public Facilities Authority on Sept. 9 authorized $96,285,000 in revenue bonds to pay for a police headquarters, a fire-rescue headquarters and a training center, and the City Council later approved an intergovernmental contract that secures that debt to the City of South Fulton.

The bond resolution passed at a Public Facilities Authority meeting earlier in the afternoon by a 5-0 vote and was followed at the council’s regular meeting by approval of the intergovernmental contract and related documents by the council in its consent-vote cycle.

The city manager, Sharon D. Subadan, told the Authority that the bonds will fund “the cost of acquiring, constructing, and equipping the City of South Fulton Public Safety Facilities project”; bond counsel and advisors described the issue as a 20-year, fixed-rate financing with a five-year call provision. ‘‘The interest rate is 4.25%, fixed rate for the life of the issue,’’ Ed Walls told the Authority during the presentation.

Wall and bond counsel Doug Selby said negotiations with Regions Bank produced terms that did not require the city to remove or raise its millage-rate cap. Subadan and several council members called that outcome a central objective. “We were successful in negotiating with Regions Bank to fund us without increasing or removing our millage cap,” Subadan told the board and council.

Doug Selby, the board’s counsel, said the resolution authorizes standard bond provisions, requires judicial validation under Georgia law and ties bond security to an intergovernmental contract under which the city will make the payments. The documents include provisions that would require additional certification if the city later sought additional similar intergovernmental-contract financings while the cap remained in place.

The Authority’s motion (to approve the bond resolution as presented to the board) passed by voice vote; the subsequent City Council consent-items vote approved the intergovernmental contract and related documents on the regular meeting agenda.

City officials said the five-year call on the bonds provides an early refinancing opportunity and that Regions’ willingness to proceed under the cap avoided the politically sensitive step of amending the city charter or raising the cap. Council members who spoke afterward thanked staff and outside advisers for reworking the deal after resident feedback about preserving the cap.

The bond proceeds will be placed with the project custodian and requisitioned for project costs; documents discussed at the meeting name Regions Bank for several custody roles.

Next steps: bond-validation filings in the Superior Court and document finalization before closing were described as technical steps that staff and bond counsel will complete prior to delivery of the bonds.