Paducah approves $27.82M general-obligation bond for riverfront and sports park

The Paducah Board of Commissioners on Jan. 13 adopted an ordinance authorizing the issuance of City of Paducah general obligation bonds, series 2025A, in an approximate principal amount of $27,820,000 (subject to an increase of up to $2,785,000 or decrease by any amount).

The ordinance directs that bond proceeds may be used to finance riverfront infrastructure improvements (including a riverboat excursion pier and plaza, improvements to transient boat dock facilities, intersection improvements and a multimodal pathway) and to finance a new municipal sports park complex. The ordinance also authorizes payment of issuance costs and any credit enhancements.

Nut graf: The bonds pledge the full faith, credit and taxing power of the city and include a provision requiring an annual tax levy sufficient to cover principal and interest, subject to available lawfully available funds and credits. City staff said portions of the debt service are expected to be offset in future years by bed-tax collections dedicated to the Sports Tourism Commission and by tax increment financing (TIF) receipts for downtown development.

City staff member Darren, responding to questions from the commission, said the bond proceeds are divided between two primary projects. "The largest of the two is the city's portion of the Paducah Sports Park," Darren said, and noted the commission and McCracken County previously entered an interlocal agreement that dedicates a portion of a 3% lodging (bed) tax to future debt repayment. He said the sports-commission set-aside requires that, beginning 12 months ago, 80 percent of its collections be placed toward future debt, split equally between the city and county, yielding about $500,000 annually for the city under current collections.

Darren said roughly $4.5 million of the bond proceeds will cover a shortfall on the riverfront construction contract after accounting for previously received federal and state grants and local match already committed. He told the commission the bonds will be sold at public competitive sale and mature by varying amounts through 2045.

The ordinance includes a general obligation pledge (Section 12) stating the city will levy, in addition to other taxes and without rate limitation, a direct tax in an amount sufficient to pay principal and interest on the bonds as due, with credits applied where other lawfully available funds are appropriated.

Questions from commissioners focused on how dedicated bed-tax revenue and future TIF receipts will reduce the city's payment requirements; Darren said those revenue streams will help but will not fully cover the city's bond payments under current assumptions.

Call and vote: The city clerk called the roll after debate. Commissioners Henderson, Smith, Thomas and Wilson and Mayor Bray each voted Aye. The ordinance passed.

Ending: Staff said details about the bond sale schedule and final pricing will follow once the city accepts a purchaser at public competitive sale and finalizes required notices to the Kentucky local debt officer.