Maricopa’s coffers are $20 million richer

The city of Maricopa’s bank account is a bit heavier these days as $20 million in bond money has been deposited to help fund possibly two parks and recreation projects.

City officials had two options when issuing the $20 million in bonds: directly issuing the bonds themselves or applying to the Greater Arizona Development Authority for bond issuance. GADA was created by the Arizona legislature to assist governments with the development of infrastructure by helping them secure low-interest bonds.

The city’s lack of a credit rating would mean a high interest rate if leaders were to issue their own bonds with no assistance; therefore, staff recommended using GADA, and city council complied

“Any point of difference in an interest rate is significant when you are talking about this much money,” said City Manager Kevin Evans.

In addition to utilizing GADA in the issuance of the bond, the city was able to take advantage of a special program set up through the Economic Recovery and Reinvestment Act, which created  Build America Bonds.

Through this program, the U.S. government pays 35 percent of the interest on debt service.

“By using GADA and the Build America Bonds, we were able to save the city nearly $3 million in interest and other fees,” said the city’s financial advisor, Greg Swartz.

Homeowners will see the first impact of the sale of these bonds on their November 2010 property tax statement, and the payments of roughly $20 to $30 per year on a home assessed at $100k in value will continue the next 20 years.

The $20 million, part of a $65 million total bond package, is scheduled to fund a 36-acre sports complex and recreation center. The sporting complex would include baseball, soccer and football fields, while the recreation/aquatic center would be a minimum 50,000-square foot facility and cost approximately $16.5 million.

“This $20 million gives us the flexibility to do either of these projects, or a combination of both,” Smith said. However, Smith added the city council has not decided the specifics on the projects or how to staff them.

Evans said he could not identify the location or the size of the land the city is considering purchasing, but said if the construction market allows, the facility could be expanded beyond its original specifications.

“We are going to do the best we can to maximize all of the money that we have been authorized to spend,” he said. “This is a very advantageous time to build.”

The city council will have to approve site plans, land purchases and each step of the project, but Evans could not provide a timeline for any of the decisions to be made.

“We want to get this started as soon as humanly possible and should have some firm dates within the next 30 days,” he said.

File photo