The city of Chattanooga will pay a $15.6 million fee in order to refinance a bond contract left over from Mayor Bob Corker's tenure.
"We don't have any other choice, do we?" asked Councilman Jack Benson.
On a unanimous 9-0 vote Tuesday night, the City Council approved refinancing a $74.8 million bond from 2004. The bond was used to build the River Pier Garage, and also to pay off previous bonds taken out to finance the Chattanoogan hotel, the Development Resource Center, a downtown parking garage and the expansion of the Trade and Convention Center.
The city is refinancing the agreement, but to do so, it must pay a $15.6 million termination fee.
BY THE NUMBERS* $74.8 million: Total amount city had to refinance* $59.6 million: Amount refinanced of old bond* $15.6 million: Penalty for breaking agreement with old bondSource: Chattanooga
Daisy Madison, the city's chief financial officer, said Tuesday that, under the new bonds, the annual debt service will go up $100,000. She said that, with paying the termination fee, the city would be paying virtually the same amount as it initially borrowed.
Councilwoman Deborah Scott said she did not like the options given the council, but it appeared to be the best route to follow.
In other news, Mayor Ron Littlefield warned council members that the new water quality, or stormwater, permit could be trouble for the city. He said the new permit would be issued on Sept. 30, and that portions of it were troublesome.
Some parts of it appear to be more about doing paperwork than handling the problem, he said.
Federal and state regulators have cited problems with the city's water quality and sewer programs, mostly dealing with administrative procedures and testing.
Also, the council said they would look at the city's animal ordinance in two weeks after some complaints from residents who said they would like to have chickens on their premises for environmental reasons.
Contact Cliff Hightower at chightower@timesfreepress.com or 423-757-6480. Follow him on Twitter at twitter.com/CliffHightower.