Looking for a better interest rate during a sagging market, the city will combine several multimillion-dollar bonds for city improvements and the future Volkswagen plant, officials said Monday.
Dan Johnson, chief of staff for Mayor Ron Littlefield, said the City Council already authorized the city to look at issuing $65 million in bonds separately. The city will go to the bond market within the next few weeks, if the council approves the measure, he said.
PUBLIC MONEY AND VOLKSWAGEN
Projects at the Volkswagen site in a city bond issue include:
* Building streets
* Welcome center
* Fire station
* Wastewater, water and stormwater drainage
* Electric transformer station
SOURCE: City of Chattanooga
“We could probably get a better rate together than separately,” he said. “You can get a better rate the larger the bond issue.”
The city is combining three bond issues into one. For fiscal years 2007-08 and 2008-09, the council already has approved up to $40 million in bonds — $20 million for each fiscal year — for capital improvement projects around the city, Mr. Johnson said. The money will pay for improvements at the Summit of Softball sports complex and Warner Park and several other projects.
City officials also determined that Chattanooga’s share of work for the Volkswagen plant, to be built at Enterprise South industrial park, would probably cost around $25 million, Mr. Johnson said. Projects at the VW plant include a fire station, a helipad, a welcome center and various infrastructure work such as new roads, drainage and electrical equipment.
The county also is paying a portion of the costs at Enterprise South.
Council members said Monday they will hear more about the bonds today during committee meetings. City officials have said the higher the interest rate, the fewer projects that could be done, and Councilman Leamon Pierce said he had concerns about issuing the bonds.
“I don’t know whether it’s good timing with the way the stock market is right now,” he said.
Councilman Manny Rico said the city needs to approve the bonds and finish the project at Enterprise South so the VW plant will be up and running. The quicker that happens, the quicker the city can get a return on its investment, he said.
“You can’t sit by and do nothing,” he said.
“It’s a tremendous cost,” Councilman Jack Benson said, “but the return should more than justify the expenditure.”