New pastor in pulpit at First United Methodist
The Rev. John Krause and his wife Linda.
On Sept. 15, the City of Eunice will be out of debt, redeeming the recreation complex bonds on that date, 10 years ahead of schedule.
The City Council approved the call for redemption at its August meeting last Tuesday, approving using about $1.4 million in cash and $250,000 in sinking fund and reserve fund deposits to pay off the debt.
The action will save the city about $442,000 in interest payments otherwise due over the remaining 10 years of the debt.
The council action came with no discussion after Auditor Steve Moosa explained the process and its benefits. There had been no discussion at recent council meetings about the possibility of calling the bonds.
That contrasts to four years ago, when then-Mayor Bob Morris proposed defeasing the bonds, a procedure with a similar objective but quite different in approach.
At that time, defeasance would have required the city to set aside $2.1 million of its cash in a fund that could not be touched until the bond call this year. Creating the defeasance fund would have stopped the city’s annual $200,000 or so payment into the bond sinking and reserve funds.
Morris argued that the city could afford the cash set-aside and that the $200,000 could better be used annually for general operation expenses.
The council disagreed 3-2 and the city has spent about $800,000 to properly underwrite the debt funds each year. The opponents, none of whom now sits on the council, were concerned the city might need some or all of the $2.1 million that it would have had to set aside. Turns out it didn’t.
The bond issue was secured by a share of the revenue stream of a sales tax passed in the 1960s, according to City Clerk Ginny Moody.
That share is now available for other uses. Additionally, voters this year gave the council permission to use up to 10 percent of a sales tax capital fund for operating expenses in the event of an emergency.
Before selling bonds for the ball parks, the city financed construction of city hall through a bond issue similarly collaterialized.
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