The City of Yukon is about to get a little deeper in debt, but officials say the end results will be worth it.
The city council took the first steps Monday to sell about $5.5 million in bonds to help pay for the city’s costs related to several capital improvement projects, including the relocation of three utilities on State Highway 4, along with the purchase of rights-of-way and the relocation of utilities for the Frisco Road-Interstate 40 interchange project.
Chris Gander, of Bank of Oklahoma Financial Services, presented a proposal to send out bid packets for $5,533,260 in bonds.
The city, under the proposal, as it did last year with the sale of two other bond packages, will pay interest-only on the package until fiscal year 2024.
The money will be sold as a private placement debt rather than a general obligation bonds.
Gander said that by using the private placement concept, the city can reduce its overall costs.
Both bond packages sold last year were done in the same manner.
The city also has proposed another bond issue in 2019 to cover the repayment of a loan from the Oklahoma Turnpike Authority to relocate the city’s main waterlines from its well sites at Will Rogers World Airport.
The move was needed because of a project to extend the John Kilpatrick Turnpike.
The bonds will be paid for through the city’s sales tax revenue, Gander said.
Officials hope to award the contract for the bonds within a month or so.
Meanwhile, Crosby said the funds will be used to cover expenses related to the rights-of-way acquisition, staking and roadway design on State Highway 4.
In addition, the money will fund the costs of relocating utility lines owned by Oklahoma Gas and Electric, Oklahoma Natural Gas and DCP Midstream.
The city is obligated to relocate the utilities because the lines are within the rights-of-way for a bridge project.
Meanwhile, Crosby also said the city has been granted permission to begin acquiring rights-of-way for a project that will add an interchange to Interstate 40 at Frisco Road.
That phase of the project is expected to cost about $1.26 million and includes the design, a geotechnical study, utility coordination and rights-of-way acquisition.
The majority of the bond money, however, is expected to be spent on the construction of a new animal shelter.
Crosby has estimated that project will cost $2,679,260.
The facility will replace the city’s outdated and overcrowded animal shelter.
The design portion is budgeted at $79,260. Construction is estimated at $2.6 million.
Crosby said the project is expected to go to bid this fall.