City Manager Pete Stasiak conceded as much as he spoke to those attending the Candidates Forum held Tuesday night at the Kiamichi Technology Center regarding two city of McAlester questions that will be on the Nov. 2 ballot.
Stasiak closed out the forum with a presentation regarding the two city propositions, and then concluded by answering questions concerning the measures.
Proposition No. 1 asks voters to approve a $40 million package to refinance the McAlester Public Works Authority’s 1999A Revenue Bonds.
Stasiak and other city leaders say it’s for the purpose of achieving $13.8 million in debt service savings. The measure calls for the savings to be used to fund street improvements, as well as related infrastructure improvements.
Proposition 2 asks for authority to levy a one-cent sales tax, to supersede a current tax levied under City Ordinance 1166.
Stasiak said since the new tax would supersede the current one, no additional tax would be added. If the two measures pass, the 9 percent sales tax rate in the city will remain the same and there will be no sales tax extension, the city manager said.
Passing the measures would authorize the McAlester Public Works Authority to issue the principal amount of up to $40 million in new replacement debt, with the proceeds used to both retire old debt and finance the street reconstruction program.
Because of the lower interest rates, Stasiak said an estimated $12 million will be available for street construction from proceeds resulting from the new replacement debt.
The bond payments are currently due for completion in 18 years, but if refinanced, they would be due in 15 years, so it could be paid off three years earlier, according to Stasiak.
“We’re having an additional $14 million dollars and our payments are still the same,” Stasiak said, rounding off the $13.8 million which Proposition No. 1 states would be debt service savings.
If the propositions fail, the sales tax rate in McAlester will remain the same at 9 percent; the sales tax won’t expire early and the city will not have funding for the street reconstruction program, according to the city manager.
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