Hannibal Board of Public Works exploring bonding as an option to help pay for expensive upgrades.
With millions of dollars worth of government-mandated improvements on the horizon, the Hannibal Board of Public Works has been striving to find creative ways of funding the upgrades. Late last year the BPW Board approved exploring bonding as an option.
On the surface, one major obstacle faces the BPW in regard to issuing bonds.
“We have no bonding authority right now and to get it we have to have a referendum, a vote of the people, for which we are not prepared at this time,” said Bob Stevenson, general manager of the BPW.
Stevenson acknowledges that because of low interest rates, bonding is intriguing.
“If we had authority to sell bonds, we could get access to some state revolving fund loans that have incredibly low interest rates now,” he said. “I think that assumes still having tax free municipal revenue bonds, which may or may not be available in the future, depending on what Congress does.”
The BPW is facing from $10 million to $20 million in water and sewer upgrades in the not-too-distant future.
“If we had to borrow the money to accomplish that all at once, rates would have to go up significantly more to handle it than if we could just work it along with cash as we had the money. We’re trying to avoid interest payments,” said Stevenson, adding that if the BPW had to borrow the money, almost half the cost would be interest payments. “Our strategy has been to delay as long as we can (making the improvements) and stretch those things out, and collect rates ahead of time to try to pay for everything with cash, which ultimately keeps more money in the city.”
The process of gathering information about bonding is ongoing.
“There are a lot of questions and ‘what ifs,’” said Stevenson. “Eventually out of that would come a document or description of a plan that people could read and understand and weigh its merits enough to vote on it.”
Before the matter would ever come to a vote, Stevenson said a series of public meetings would take place to describe the plan and its financial impact.
“It (meetings) would be similar to what the school district has gone through before it built its last two new schools,” he said.