OCEAN CITY — Shortly after the end of the year, Ocean City will go back to the bond market to sell $17.3 million in general obligation bonds for various projects after the sale was approved this week.
The Mayor and Council reviewed Monday a request to issue general obligation bonds in an amount not to exceed $17.3 million. The council unanimously approved the bond sale with little discussion.
By way of background, almost every year, the city sells general obligation bonds to pay for major capital projects and other significant expenditures. Selling general obligation bonds allows the city to pay for major expenditures over a long period of time with attractive low interest rates rather than taxing the general fund.
The $17.3 million bond sale approved on Monday will fund a handful of capital projects and also allow the town to refinance other outstanding debts at lower interest rates. For example, included in the bond package is $4.25 million for a new wastewater secondary clarifier project at the town’s facility at 14th Street. The existing system is 27 years old and is in danger of failing and needs to be replaced.
The bond package also includes a water filter project at the town’s facility on Gorman Avenue to the tune of $1.95 million. That facility was built in 1972 and many of its components are using outdated technology that needs to be upgraded.
In addition, the bond package includes $1.1 million for the purchase of the Sandpiper Energy property at 67th Street. The parcel is the next piece of a larger property purchase puzzle in the 67th Street area for a future state-of-the-art water treatment facility.
Sandpiper Energy has owned the property as part of its ongoing conversion in town from propane to natural gas. With that project nearing completion, the utility company no longer has use for it and the town needs the parcel to complete its future water treatment plant goals.
The existing water treatment plant at 44th Street has been in service for over six decades and has outlived its useful life. To that end, the town has been piece-meal purchasing parcels in the area of 67th Street for the purpose of planning and ultimately building a new water treatment plant.
In addition, on the advice of the town’s financial advisors, two outstanding debts will be refinanced through the bond sale. One is a loan to pay for the new Jeeps and trams for $1.3 million and the other is $8 million in 2010 general obligation bonds. Refinancing the two existing debts with the upcoming bond sale will save the town roughly $1 million.
