Centerton council approves $38.175M revenue bonds to finance community center and capital projects

The Centerton City Council on Oct. 8 adopted Ordinance 2024-29 to authorize the sale of Sales and Use Tax Revenue Improvement Bonds, Series 2024, totaling approximately $38,175,000 to finance a new multi-use community center and other capital improvements.

Bond counsel and the city's underwriter described the market dynamics, pricing and structure. Cheryl, the underwriting representative, said the bonds were competitively sold the morning of the meeting; the bonds will be repaid from net collections of the city's 1% sales and use tax that voters extended at the March 5 election. Jill (financial advisor) said that pricing and an eight-year call feature would give the city refinancing flexibility; the all-in interest cost was reported at about 4.13% after pricing actions that day.

Council members asked about payoff timelines and the effect of strong local sales-tax growth: the underwriter said if growth continues at recent 12-month rates (about 10.98%) the bonds could effectively pay off in fewer years than their statutory maturities, which would affect the city's need to return to voters for new tax authority if the tax revenues go away.

The ordinance also authorized execution of the bond purchase agreement, a preliminary official statement, a trust indenture, and related documents; council adopted the emergency clause stating the project must proceed promptly, and authorized closing targeted for Nov. 14 to make funds available for the community center.

Next steps: staff will finalize closing documents with the underwriter and counsel, and proceeds will be available for drawdowns on project costs; council will continue to monitor sales-tax receipts and debt service projections.