Two bonds were authorized by the Sunnyside City Council last night.
The first totals $2,760,000 and is a limited tax general obligation bond to cover the cost of the city acquiring the former Monson Ranches feedlot. The second totals $2,295,000 and is a water and sewer revenue bond to cover the cost of extending water and sewer services to the property.
Sunnyside City Manager Bob Stockwell told the council the bonds went to market Aug. 23 and funds should start flowing to the city by Sept. 12.
The proceeds of the limited tax general obligation bond will be used to reimburse the internal loans made from various city funds to purchase the former feedlot, plus the interest accrued on these loans, Stockwell said. The city's purpose in purchasing the property was to terminate the operation of the feedlot and make the property available for economic development projects.
The water and sewer revenue bond will cover the cost of extending water and sewer services to the property.
Stockwell said this project will make the property developable for a broad range of commercial and light industrial uses. Once developed, the revenue generated from the water and sewer services will pay back a significant portion of the cost of the bonds, according to Stockwell.
Stockwell said conservative estimates of the value of the property when full utilities are on site will far exceed the city's cost of purchasing the property and extending services. Over time Sunnyside should recover significantly more than the cost of purchasing the land and the initial development of the property while creating additional jobs and generating additional taxes to support the city's operations, Stockwell said.
The bonds will be paid back over a 20-year period and the city will make its first payment Dec. 1 of this year on the water and sewer revenue bond for $25,503. A $161,753 payment will be made on the limited tax general obligation bond Dec. 1, 2008.
The city won't start paying on the principal of the water and sewer revenue bond until 2018 and will start paying on the principal of the limited tax general obligation bond in 2010.