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Sanford council authorizes $13.45 million partial bond for new fire station
Summary
The council approved partial bond financing not to exceed $13,450,000 through the Maine Municipal Bond Bank to fund construction and related costs for a new fire station; council discussed phased borrowing to limit interest and arbitrage exposure.
The Sanford City Council on April 7 voted to authorize partial bond financing of up to $13,450,000 for construction of a new fire station, including engineering design, transaction costs and related expenses.
Councilor Hitchcock moved the motion and Councilor Tranchemontagne seconded. The motion authorized the treasurer and the mayor to issue general obligation bonds through the Maine Municipal Bond Bank, instructed the city manager to execute a loan agreement in a form required by the bank, and empowered municipal officers to take steps necessary to complete the financing.
City Manager Steve Buck explained the financing approach is part of a previously authorized borrowing package. Council members noted the city had earlier authorization to borrow up to $42.5 million for two stations and said the current borrowing is phased to (1) avoid paying interest on funds not yet needed and (2) reduce federal arbitrage risk that can arise when borrowed funds are held longer than construction requires. Buck said the borrowing here represents the next scheduled tranche for the headquarters station and that savings from earlier bids and federal awards would be applied in later borrowings.
The motion passed without a roll-call tally shown on the record. No amendment to the motion was proposed during the meeting.
Next steps: City officials will execute the loan documents, work with the Maine Municipal Bond Bank to issue the bonds, and proceed with construction activities scheduled under the capital program.
