Print

Email story

Comment

Email editor

Bonds to be issued to bury utility lines

Next, Indian Shores officials must determine the total cost and just how much they might save through various strategies.

By JADE JACKSON LLOYD and SHEILA MULLANE ESTRADA
Published January 16, 2005

INDIAN SHORES - They tentatively agreed Tuesday to borrow $6.3-million from the Florida Municipal Loan Council to do the project. Now, town councilors must figure out how much burying utility lines for the entire city will cost.

On Tuesday, the town council passed an ordinance on first reading to borrow the money to bury 2.6 miles of utility lines along Gulf Boulevard, from Walsingham Road to the city's southern boundary near the Park Boulevard bridge.

The city wants to do this in conjunction with a state road improvement project, slated to begin in June. The utilities project would start 90 days before the road project.

"A bond issue is the best way to go," said the town's finance director, Chris Phillips. By pooling its bonding requirements through the state's municipal loan council, the town qualifies for a higher rating and lower borrowing costs.

The proposed bonds would mature in 31 years from the borrowing date, with the town paying up to 6 percent interest.

Commissioner Sandy Shuler said Tuesday she's concerned with the requirement that the town spend the bond proceeds.

If too much is borrowed, the town will have to spend the extra money on other capital projects - and will pay more interest than otherwise needed. If too little is borrowed, the town will have to either borrow again at a higher cost or find other sources for the needed money.

The final vote will not come until a special meeting Jan. 25, just in time to meet the Florida League of Cities' Jan. 27 deadline for the next round of statewide municipal bond issues.

Final approval is not guaranteed, however. The town still does not know the exact cost of burying its utility lines

"We are still negotiating contracts (with Progress Energy and other utilities)," Mayor Don Taber said. "We don't have a solid figure yet."

During a Thursday special workshop, town councilors and city staff tried to figure out ways to shave as much from the city's portion of the bill as possible. They hope to follow in the footsteps of Sand Key residents several years ago, Taber said.

When Progress Energy asked the residents to pay a portion of the cost to bury cable and telephone lines, Taber said the residents refused and the lines were buried anyway, at no charge.

"The precedent has been set for several towns where they just didn't pay them" for putting utility lines underground, Taber said, during a Friday phone interview. "The utility companies have a pole agreement with Progress Energy. When the poles come down, they've got to put new poles up themselves or they'll go down (underground) with them. In previous cases, towns have not paid. We feel why should we pay if other towns haven't?"

In addition, the city hopes to save $1-million by convincing Progress Energy to bury its utilities when it opens the road up for construction, Taber said. By doing it together, the city will not have to pay to recompact the road, he said.

"In the beginning, the cost from all three companies was $6.3-million," Taber said. "If it goes the way we've said, the job should cost around $4-million."

The city approached Progress Energy with the proposal Friday and should hear something next week, Taber said.

"It's the beginning of a negotiation. I'm thinking we'll get some response once this hits the paper," he said, laughing.

[Last modified January 16, 2005, 00:33:22]