CITY WILL SAVE $700,000 WITH BOND REFINANCING

The city of Cape Girardeau will take advantage of historic low interest rates and refinance taxpayer bond obligations, saving about $700,000.

The Cape Girardeau City Council Monday approved a resolution to refinance public facilities bonds from 1988 and 1989 and reinvest a city employee pension refund.

The city also will finance $820,000 of street tax bills that will be issued against abutting properties for South Minnesota and Cape West Parkway.

Assistant City Manager Al Stoverink said the financial maneuvering will enable the city to take advantage of current low interest rates. The bonds will be marketed at an average rate below 5 percent significantly lower than the rates to which the city now is obligated, he said.

"Recalculating the final numbers, it looks like we'll generate a couple hundred thousand dollars more than we first thought," Stoverink said.

But at the council's study session, Mayor Gene Rhodes said he is wary of the city manipulating the books to authorize further indebtedness. He said he doesn't object to refinancing existing debt, but questioned incurring more than $800,000 in new debt for street construction.

"To me, it's nothing more than a legal way to sidestep a public vote on city indebtedness," Rhodes said.

But Stoverink explained that the street improvements will be paid by abutting property owners. The payments will include interest at a rate higher than what the city will pay for the bonds to finance the work.

Stoverink said the bonds must be issued to enable the city to pay for the street improvements.

"In this case it boils down to an economic development issue of whether you want to finance the paving of Cape West Parkway," he said. "If you place the restriction on this kind of project that you're not going to do it without a vote of the people then you're not going to be able to do these economic development projects."

Stoverink said the street improvements will generate revenue by fostering commercial development. He said Rhodes' concerns are more appropriate with regard to projects that are funded through general sales and property tax revenues.

"But this project will be paid for by property owners along the street," he said. "It does not involve any tax from the general public."

In other business, the council agreed to assess abutting property owners the majority of costs for the extension of Mt. Auburn Road to the new bridge route. The city will tax bill the costs of 40 feet of the 44-foot-wide arterial extension and will share in the costs for the remaining four feet of pavement.

Kevin Spaeth, a local attorney representing Health Services Corporation of America, said his client the primary property owner affected by the extension favors the city sharing in more of the street costs.

Spaeth asked why Mt. Auburn is being handled differently than Lexington Avenue, a north-side arterial street under construction.

Stoverink said: "We were looking at Lexington as an arterial principally going through a residential area, so we treated it differently."

He said the Mt. Auburn extension likely will be developed as a commercial street and that the city typically tax bills all of the costs for commercial streets.

"Our recommendation was based on 40 feet being the standard that's been tax billed for commercial arterials," Stoverink said. "We're recommending the city share in the cost of the remaining four feet."

But Spaeth was unswayable.

"It doesn't appear to make sense," he said. "You treat the landowners in the south end of a circumferential drive differently from the people on the north end."

In other action the council:

20Gave initial approval to the issuance of bonds to fund federally-mandated improvements at the city's waste water treatment plant.

20Approved a resolution authorizing a lease agreement with Mary Bergen to operate the restaurant and lounge in the terminal building at the Cape Girardeau Municipal Airport. Bergen will rent the restaurant for $200 per month, with six months of free rent for start-up.

20Gave initial approval to a measure authorizing 3-inch asphalt overlay for Brenda Lane and Scotts Lane, and concrete paving and curbing for Cape West Parkway between Campster Drive and Siemers Drive.

20Gave initial approval to a special use permit for Wanda A. Pipkin to operate a veterinary clinic at 1425 Kurre Lane in a commercial district zone.

20Approved a resolution authorizing a $400,000 contract with Penzel Construction for improvements to the entrance road at the Cape Girardeau Municipal Airport.

Passed a resolution endorsing today's ballot measures regarding annexation of Twin Lakes subdivision and new boundaries for ward council elections.