WOODSTOCK – The city is working toward refinancing debt left on the Woodstock Recreation Center by issuing alternate revenue bonds, a prospect that officials say will save close to $150,000.
The then-privately operated fitness center at 820 Lake Ave. was purchased in 2003. The city borrowed about $1.5 million to acquire the building and members, and to add on a community room and gymnasium.
But officials say that selling the 2003 bonds and issuing alternative revenue bonds instead will save money in the long-term.
"We can get a lower interest rate, which is why we're converting them," Finance Director Paul Christensen said.
Sometimes referred to as "double-barrel bonds," alternative revenue bonds are issued with the idea that an alternative revenue source will cover the bonds – things like motor-fuel taxes or user fees. If the revenue source doesn't pan out, the burden falls on taxpayers.
In this case, Woodstock officials pledged membership fees to pay for the purchase of the building and membership, and park impact fees to pay for the construction to add-on to the building, Christensen said.
Tuesday night, the Woodstock City Council held a public hearing on the proposal to sell bonds from the 2003 transaction so that the alternate revenue bonds can be purchased. No members of the public spoke during the hearing – a requirement under state statute.
An ordinance authorizing the alternative revenue bonds to be issued is scheduled to appear on the May 20 City Council agenda.
The ordinance will combine the 2003 debt with debt from several other projects, including road improvements, Davis Road Soccer Fields construction and Merryman Park construction. That debt, currently combined as series 2005B bonds, is already in the form of alternative revenue bonds.
"That was the second reason," Christensen said. "We want to combine them into the same type."