Beach approves $7.8M bond issue

The St. Augustine Beach Commission voted Monday night to approve a roughly $7.8 million loan that will refinance a number of the city's debts.

Commission members unanimously approved the bond issue, to be issued by the Florida Municipal Loan Council - a part of the Florida League of Cities. According to the city's agenda, the resolution, labeled Resolution 16-11, authorizes a loan of up to $9.1 million. A memo from the city's chief financial officer, Melissa Burns, says the difference between the roughly $7.8 million needed to refinance the principals on the loans and the high cap will provide a "cushion" for the financial advisors to keep them from having to come back to the city should there be "any movement in the market."

The bulk of the money from the loan - $4.5 million - will be used to pay off the debt associated with the 2015 purchase of 4.5 acres of the Maratea property, which is now Ocean Hammock Park. Of that money, $3 million will go to pay back the Trust for Public Land, which purchased the property on the city's behalf. The other $1.5 million will replenish the money that was taken from the city's savings to make the first payment on that debt.

The remaining money will refinance a 2004 debt of just under $1.9 million that was used to purchase land for public restrooms on 10th Street. A 2010 loan - representing almost $1.4 million in debt - that refunded a 1999 bond that was used to build City Hall, will also be refinanced. The savings from refinancing those two debts will be just over $360,000, according to Burns' memo.

The Commission was originally scheduled to vote on Resolution 16-11 at their regular Aug. 1 meeting, but postponed the decision to Monday's special meeting in order to gather more information.

After Mayor Rich O'Brien opened the recent meeting, City Attorney Jim Wilson explained that a review of city records found that a referendum, passed in 2008, allowed the city to take out a $7 million bond that could be paid back with money from ad valorem taxation.

Of that, less than $5.5 million had been used, so the city will able, in the new loan, to pay back $1.65 million with ad valorem money, which could result in more favorable rates for that portion of the loan, Wilson explained.

"That changes the numbers they work with to our benefit," Wilson explained.

The discovery will require that the loan be written up as two agreements - one for the ad valorem-backed amount and another for the remainder.

Monday's motion included language that will allow Wilson and City Manager Max Royle to work out the particulars of the deal.