OCEAN CITY — The Town of Ocean City last week successfully sold nearly $17 million in general obligation bonds for infrastructure improvements after a bidding battle featuring 10 prominent national underwriters.
Last Thursday, Ocean City officials offered for sale $16.7 million in general obligation municipal purpose bonds and were awarded with a low true interest rate of 2.63 percent. The bond sale attracted national interest with 10 noted underwriters competing. The bids ranged from the low 2.63 percent to as high as 2.8 percent for the bonds, which will mature from Dec. 1, 2016 through Dec. 1, 2035, if, of course, the town does not pay them down before that, as it is wont to do with debt service.
Mayor and Acting City Manager Rick Meehan awarded the winning bond to Raymond James and Associates of Memphis, Tenn. Sam Ketterman of Davenport and Company, the town’s financial advisor, said Ocean City did well in the bond sale.
“The interest rate speaks highly of the town’s position in the market,” he said. “Town officials should be proud of the result.”
Among the projects proposed for funding from the bond sale is $5.2 million for the construction of a new water tower at 1st Street, a project that broke ground this fall. The plan is to eventually eliminate existing elevated water towers at 15th Street and Worcester Street and replace them with the new tower.
Another project slated to be funded by the bond sale is a fourth secondary clarifier for the town’s wastewater department at an estimated cost of $5.4 million. The bond sale proceeds would also be used to fund the replacement of aging wastewater mains throughout the town, a project expected to cost around $6.1 million. Finally, some of the bond sale proceeds would be used to upgrade the wastewater treatment plant’s electrical system.
In similar news, at Tuesday’s work session, the Mayor and Council approved an emergency ordinance for the lease of certain heavy equipment including backhoes and equipment for the wastewater department.
“Unfortunately, we had to accept a bid by Dec. 17 because of fears of an interest rate rise,” Finance Director Martha Bennett said. “The bids came in much lower than expected and they have such a favorable rate that I’m recommending we accept the bid.”
Bennett explained there were eight bids and the successful bidder was Bank of America, which was offering an eight-year lease at 2.75 percent.