Avondale Estates borrows $8.59 million to pay for Town GreenFILE PHOTO: People gather at the Avondale Estates Town Green for a day of surf music during Southern Surf Stompfest on Saturday, Sept. 30, 2023. Photo by Dean Hesse.
This story has been updated.
Avondale Estates, GA — The Avondale Estates City Commission, at its Nov. 15 special called meeting, approved the issuance of the $8.59 million in revenue bonds that will pay for the Town Green, market pavilion and part of the North Woods project.
The city commission also approved the final terms of the bonds, and reaffirmed the intergovernmental agreement with the Urban Redevelopment Agency.
The Urban Redevelopment Agency met on Wednesday night before the city commission meeting. The members of the URA are the mayor and city commissioners. The board approved a resolution authorizing the issuance of revenue bonds and reaffirmed its intergovernmental agreement with the city. The URA is the bond issuer, but the city has to pledge its full faith and credit to pay off the debt.
“That bow was tied. That’s good stuff,” Mayor Pro Tem Brian Fisher said.
On Wednesday morning, the city went out for sale for the URA’s revenue bonds. Hilltop Securities was the winning bidder with an interest rate of 4.31%, which was below what the city had anticipated. The city received eight bids and Hilltop Securities had the lowest interest rate.
The city has estimated an interest rate of 5%.
The final debt service will be about $520,000 per year over the next 30 years.
“One thing I want to point out is that due to this market movement that we got and the great execution…from the pricing results that the debt service that we showed last week, it actually had reduced by almost $725,000,” said Doug Gebhardt with Davenport and Company, the city’s financial advisor. “So, almost three-quarters of a million [dollars] of debt service savings over the life of the loan.”
Davenport is also financial advisor to the city of Cincinnati, Ohio, which sold bonds at the same time as Avondale Estates on Wednesday morning. Gebhardt said that Avondale Estates got better interest rates than Cincinnati in its bond sale.
The city and its financial advisors hope to close on the sale by Dec. 1.
The city commission issued the bond anticipation note in 2019, which acted as a line of credit the city could borrow from, City Manager Patrick Bryant previously said. Now it’s time for the city to borrow money to pay for the project.
“The bond anticipation note lasts for a three-year period. After that period, once we’re finished borrowing funds through that bond anticipation note, then we have to come back and issue an actual bond to pay off the bond anticipation note,” Bryant said at a city commission meeting in September 2022.
A spokesperson for the city previously said Avondale Estates currently doesn’t have any bond debt and has never had bond debt in its history.
The city has also announced its credit ratings. The city received an initial Aa1 general obligation unlimited tax rating from Moody’s and Standard & Poor’s has assigned the city an initial rating of AA+ with a stable outlook. Both Moody’s and Standard & Poor’s cited the city’s strong economic outlook, sound budget management and financial policies among the reasons for these prestigious ratings, according to a press release.
Avondale Estates is the highest-rated small city, with a population 5,000 or less, in Georgia by Moody’s and in the top 10% of ratings for small cities nationwide. Avondale Estates has the smallest tax digest and fifth-smallest budget of all cities, rated Aaa/Aa1 by Moody’s.
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