Several capital improvement projects are expected to take a big step forward next month when officials with BOK Financial Services return to the Yukon City Council with bids to sell $10 million in bonds.
The money will be used to help fund the construction of several projects, including three major road projects, said City Manager Jim Crosby.
During a work session held Tuesday before the city council meeting, Crosby said bonds would be used to help finance the State Highway 4 bridge project, two phases of an interchange project at Frisco Road, the expansion and relocation of Vandament Avenue.
According to a capital improvement project list provided to the council, the city expects to spend $2,081,000 for work on State Highway 4.
The project involves the removal of three bridges and the construction and relocation of a single, 1,500-foot bridge. Crosby said the location of the bridge would be moved to the west, which means the city also needs to buy a substantial amount of right of way.
The city has budgeted $85,000 for right of way purchases. One property owner in the area has an elaborate fence that would need to be replaced.
Crosby said the project has been designed, but is awaiting utility relocation. However, that can’t occur until the right of way has been purchased. Crosby said negotiations are underway.
Meanwhile, the Frisco Road project has two phases. The first phase, which involves design work, is expected to cost $351,000 in 2017, while phase II is budgeted at $225,000.
A third section for Frisco Road involving construction is $3,098,000.
The Vandament Avenue project is expected to be $1.55 million, including $1.45 million for construction.
Crosby said $1 million has also been budgeted for city street repairs, as well as more than $900,000 for contingencies.
In addition to the road projects, the capital project list also includes the constructions of a new public works maintenance facility and a storage facility that will be used to house large items, such as Christmas decorations.
The city actually awarded the contract for the maintenance building on Tuesday to Hixon Construction Co. for $725,000, which is $25,000 under the projected cost. Work on that project is expected to be completed by February.
Crosby said the maintenance building must be moved to make room for a proposed animal shelter.
Meanwhile, Chris Gander, of BOK Financial Services, said the city’s bonding capacity is in good condition. At this point, the city would be debt free by 2023.
Under the proposal presented by Gander, the city would use a private placement note and have a payment of $300,000 per year until 2022, when the previous bonds would begin to pay off.
Crosby also pointed out that the money for the bond payments already is included in the budget.
Gander also pointed out that the bond issue is $10 million, which keeps it available for banks to purchase at a lower interest rate. He said he expected this bond to sell at about 3 percent interest.
Gander said that by using private placement bonds instead of using general obligation bonds, the city will save money with lower interest rates, plus they avoid having underwriting costs and some reporting requirements.
Gander said the bid packets are due the morning of July 18. It is hoped the bonds can be sold that night.