Gulf Shores’ City Council approved a measure which would convert some of the city’s short-term credit to long-term debt.
Councilman Jason Dyken, Chairman of the Finance Committee, said the city has taken an aggressive approach to its finances since 2008.
“At that point the finance committee took it very seriously to get our fiscal house in order,” Dyken said. “Since that time, we’ve met regularly and over the last five or six years we have used the low interest rate environment to fund a lot of the projects we do in this community.”
In the last few years, he explained, interest rates have gone up several times and the trend seems to lean toward more rate increases.
“We, the finance committee, have been looking over the last two years at our short-term obligations- which is what we have used for low-interest funding- and when do we covert that short-term, low-interest rate financing into a long-term debt,” Dyken said. “At the end of 2017, we felt the time was right with the prices we are able to get in the bond market to make that conversion.”
He compared the short-term funding to home-equity lines of credit or credit cards, saying the city has always payed off the interest and principal.
“Now is the time we need to convert that credit card or home equity line into permanent financing,” Dyken said. “We need to roll that into our 30-year mortgage.”
Finance Director Cindy King said that $15,260,000 of taxable warrants will be financed for 15 years and $21,820,000 of nontaxable warrants will be financed for 20 years.
The resolution passed unanimously.
The council then looked ahead to the Fourth of July and discussed the city’s fireworks show.
Grant Brown, Recreation and Cultural Affairs Director, spoke at the previous work session about the contract with Pyro Shows, Inc., who has done the city’s fireworks displays for the last six years.
“They are a fantastic company to work with,” Brown said. “They produce a wonderful show. This is an artistic show as much as it is just a number and cents analysis. Over the years Pyro Shows has proven to provide the best shows for the best price that we can arrange.”
The assembly permit has the show at the state park pier, something Brown said makes the most logistical sense.
“If you remember over the years between barges and getting bad weather in, it can be a beautiful day and the seas don’t cooperate,” Brown said. “With high winds, you may not be able to fire fireworks from a barge. So, working with the Department of Conservation and Natural Resources (DCNR) and the State Park, we have settled upon a very safe and nearly foolproof opportunity to have fireworks display in our area.”
Related to the public assembly permit was a memorandum of understanding between the Chris Blankenship with the DCNR, State Park Director Greg Lein and the City of Gulf Shores including insurance requirements and coordinating assistance with cleanup.
“In consideration for the use of the pier, because the pier is taken out of public use and loss of revenue. there is an $8,000 fee that the state charges the city to use the pier,” Brown said. “We feel like that is an appropriate fee based on their loss of revenue for a day and a half of fishing. It is much less expensive to use the pier for $8,000 than to hire a barge, captain, tug to do fireworks in the Gulf of Mexico.”
The public assembly permit, memorandum of understanding and contract all passed unanimously.
Also approved at the meeting were:
-Proclaiming May as National Bike Month.
-Declare buses acquired through an ALDOT grant in 2007 as surplus and transfer ownership to ARC of Baldwin County. Any equipment purchased through this grant required an 80-20 match. ALDOT has approved the surplus and transfer of the busses with the City retaining the 20 percent match based off the fair market value. LDOT has determined the fair market value of these vans to be $11,500 and $11,200. The City will be paid 20 percent for the ownership interest, $2,300 for Vehicle No. 1 and $2,240 for Vehicle No. 2, for a total of $4,540. The proceeds derived from the sale shall be deposited in the General Fund of the City of Gulf Shores.
-Awarding a bid for summer snack concessions at the Sportsplex to Repicci’s with the City receiving 17 percent of gross sales.