While researching the federal stimulus spending program, Monett City Administrator Dennis Pyle discovered Recovery Zone Bonds are available under the American Recovery and Reinvestment Act. Each county has an allocation available in either economic development bonds or recovery zone facility bonds.
"Monett is interested in the economic development bonds, called Build America Bonds," Pyle said.
According to the website for the Missouri Department of Economic Development (DED), Barry County could acquire $1,571,000 in economic development bonds, and Lawrence County could receive $1,942,000. Both counties had until Sept. 1 to notify the DED of their intention to use the bonds.
Counties that do not use the bond money have their amount reallocated to other counties, Pyle said. If the counties have no specific projects of their own, the money can be allocated in part or completely to cities in the county.
Pyle wrote the counties that Monett was interested in the bond money. Consequently, both counties contacted DED and requested their full allocation.
Lawrence County had no plans for its allocation. Monett asked for almost all the money. Pyle is proposing use these bonds to pay for a portion of the water system project, running approximately 20,000 linear feet of 16-inch water main.
The proposed line would extend from Chapell Drive and Cleveland north to Farm Road 2230, then west to Eisenhower and south to the Rutherford farm, where the city plans to build a water treatment plant to purify well water that pumps up with impurities. With booster pumps, parts and labor, the city project was estimated to cost $1,887,380, Pyle said.
Barry County had plans for some of its bond money so Pyle filed a request for $972,470. Two different projects were planned, he said.
To continue water improvements, Pyle requested funds to pay for 5,000 linear feet of 12-inch water main to run from well #15 on Moge Road to Eisenhower, then running north on Eisenhower to well #21 on the Jack Henry and Associates campus.
At well #21, which has not been put on the city system because it only recently began pumping clear water, a wellhouse needs to be constructed. Also, water needs to be held in storage where it can be disinfected with chlorine for an extended period.
In lieu of building another water tower, the plan calls for installing 700 feet of 36-inch pipes next to well #21 as a chlorine contact area. From that point, a connection will be made hooking into the water distribution system.
Pyle said the work at wells #15 and #21 will cost $547,470. Well #15 is presently on a dead end. A larger project is planned to loop the Moge Road well with the tower south of the Lowe's store, but that is not part of this project, Pyle said.
|The second Barry County project calls for rehabilitating the City Park Casino and the City Hall Auditorium. Work at the Casino would include making all the restrooms and entrances fully compliant with the Americans with Disabilities Act, replacing the central hall floor, installing new lighting, replacing the ceiling grid in the main hall, replacing windows, installing insulation on the exterior walls and replacing the siding with vinyl or masonite.||Pyle said the extent of the Casino work could get more complicated depending on discoveries along the way. Ceiling work could become more extensive depending on the location of ductwork and other materials.|
Work on the City Hall Auditorium includes painting, carpeting, cleaning the 1989 stage curtain, and repairing and upholstering all of the seats. A rough estimate of work on the Casino and auditorium adds up to $425,000.
Build America Bonds have to be used for public infrastructure or public facilities, Pyle said. The bonds are taxable, as opposed to municipal bonds that are generally tax exempt. Interest earned by the bondholders will be subject to taxation. The bonds are expected to pay a higher interest rate, making them more attractive to many customers.
Pyle said the bonds are also set up so that the federal government reimburses the city for 45 percent of the interest cost through the stimulus program. Money has to be allocated by July 1, 2010, and the bonds have to be issued by Dec. 31, 2010.
"According to the public finance consultants we've been talking to, very few of these bonds have been issued to date," Pyle said. "There is not a lot of familiarity with them. We assume they will be sold like any other bonds."
There also does not appear to be a time limit for paying back the bonds. Typically bonds for municipal projects have a payback period of 20 years, Pyle said.
From his contact with both Barry County Presiding Commissioner Cherry Warren and Lawrence County Presiding Commissioner Sam Goodman, Pyle believes the city will have support of the county officials in securing bond funds.