At Monday night’s meeting, the Eclectic Town Council voted to approve a general obligation bond in the amount of $2.5 million.
Mayor Gary Davenport said the town was able to secure the 20-year bond with an interest rate of 2.55%. The council hired Chris Williams with Rice Advisory LLC to help the town find its best option.
“I contacted area municipalities that have experience with going to the bond market and we were able to get some good advice,” Davenport said. “We met with people from three firms and we eventually narrowed it down to Chris. With the town being so small, we don’t have a bond rating so we needed someone with a lot of experience who could find us the best deal.”
Davenport said Williams found three interested financiers and the council decided to go with the offer from BBVA.
By selling land at its industrial park, the town was able to pay off a portion of a bond from 2007. Davenport said the council plans to pay off what’s left of the 2007 debt, roughly $250,000, using the 2021 bond issuance.
“Once the 2007 debt is fully paid, the 2021 bond will be the town’s only debt,” Davenport said. “The annual debt service payment for it will be less than what we were paying for the 2007 bond.”
The town plans to use the remaining money for capital improvement projects. The money cannot be used for payroll or any other operational expenses.
Davenport said the town is looking at using the money to replace sidewalks, repair buildings, replace sewers, repair streets, update town lighting or parks.
“We’re going to use the money on projects that benefit the town,” he said. “I estimate that it will take at least two years to invest the money back into the community.”