The city of Cape Girardeau will use $8.19 million in special obligation bonds to fund construction of the new fire station and make other public safety improvements, reimburse the city for purchase of the new public works building and pay off equipment leases.
The city council gave final approval to an ordinance authorizing the sale of bonds at a special meeting Wednesday night.
The bonds include money to cover the cost of issuing the bonds as well as the funding required for debt service reserves, city finance director John Richbourg said.
Cape Girardeau will spend $7.4 million on actual projects, including $5.45 million for public safety projects. Besides a new fire station, the city will replace the roofs on two fire stations, replace the air conditioning system at the police station, and purchase four fire trucks and 25 police vehicles.
The bonds used for public safety improvements will be retired over 10 years. The city will pay off those bonds with fire sales tax revenue, Richbourg said.
Another $1.6 million in bond proceeds is earmarked to pay back the city's cost of purchasing the new public works building. The city will spend about $123,500 annually in general revenue for the next 20 years to pay off the bonds.
Finally, the city will use $422,000 of the net proceeds from the sale of bonds to pay off current equipment leases, officials said.
Mayor Jay Knudtson said the city is borrowing money through the bond sale at an interest rate of 4.16 percent. "That is a tremendous rate," he said.
In other action, the council gave final approval to an agreement with the Missouri Department of Transportation for construction of a right-turn lane from Kingshighway onto Cape Rock Drive.
Under the agreement, MoDOT will pay the construction cost. The city, in turn, will pay for a cul-de-sac on Kingsway Drive, which is being turned into a dead-end street to provide room for the right-turn lane, officials said.