Bond refinance saves city $3.7 million

Alabaster will use savings from a recent bond refinancing to perform upgrades on the city's sewer treatment plant off U.S. 31. (Contributed)

Alabaster will use savings from a recent bond refinancing to perform upgrades on the city’s sewer treatment plant off U.S. 31. (Contributed)

By NEAL WAGNER / City Editor

Alabaster leaders said they will use about $3.7 million in savings from a recent bond refinance to make “badly needed” improvements to the city’s sewer treatment plant.

By refinancing a series of general obligation bonds issued in 2007, the city will save the money as the result of lower interest rates, Jason Grubbs, the executive vice president with The Frazier Lanier Company, said during a recent work session.

“We also located about a million (dollars) that the city has. So when you add that to the $3.7 million that will be available as a result of the refinance, you will have a little over $4 million.”

Grubbs said the refinancing will not extend the city’s payments on the bond series, will not affect the city’s credit limit and will keep Alabaster’s credit rating at AA-, or “very strong.”

“It’s a very good outlook for the city,” Grubbs said.

Ward 7 Councilman Tommy Ryals said a portion of the bond refinance savings will be used to upgrade the city’s wastewater treatment plant off U.S. 31 near Shelby Baptist Medical Center.

“By refunding and reissuing the bonds, we were able to free up $3.7 million primarily for capital projects which are badly needed,” Ryals said.

Because the bond series was originally issued for the city’s sewer system, the savings can only be used for sewer-related capital improvements, Ryals said.

In other business, the council:

-Entered into a contract with Revenue Discovery Systems for business license discovery services.

Through the contract, RDS will use a software system to determine if any Alabaster businesses do not have current business licenses on file. RDS will keep 50 percent of new business license revenue generated the first time a new business license is generated through the software discovery system, and the other half will go to the city.

-Entered into an agreement with the Inline company to link the city’s facilities using high-speed data fiber optics. The new connections will significantly speed up the city’s data network, and likely will be installed before the city occupies its new City Hall near the Alabaster Senior Center.