The Gainesville City Council took a big step in repaying its debt Tuesday night.

In business at the regularly scheduled meeting, the Council voted unanimously to approve an ordinance allowing First Southwest Company to sell general obligation bonds for the refunding of debt from city projects.

According to discussion, the city has a total of about $9.88 million in “outstanding obligations.”

Maria Urbina, an assistant vice president of First Southwest’s Dallas Branch, in speaking to the Council, said the selling of bonds could generate about $10.8 million — enough to pay the debt and her company for its services.

Urbina said the city has a rating of “BBB” with Standard and Poor’s and a Moody’s rating of “Baa2” — not perfect ratings, she said, but adequate.

“These credit agencies are aware of the challenges the city has gone through,” she said, also noting that Gainesville has economic vitality which earned it a higher rating than what would otherwise be given.

Urbina said the bond market has been “wonderful for the last two weeks,” and interest rates are the lowest they have been since the 1960s. She did note, however, a slight spike in Tuesday’s market of six “basis points.” She predicted the market would remain “somewhat flat” over the next year.

“If it (the market) changes dramatically and there’s no longer an economic advantage, we can pull the plug,” said Dan Parker, director of finance for the city of Gainesville.

Now that the Council agreed to refinance, First Southwest Company will announce the bond purchasing opportunity is available to underwriters today. The Attorney General’s office would have to approve, Urbina said, which is expected to take about 30 days.

Factoring in administrative costs, escrow agent fees and insurance, the total cost to the city is anticipated to be about $260,000.

In other business, the Council voted unanimously to suspend the city charter and deny an ordinance to amend the Athletic Field Enhancement Fee provisions.

Patrick McCage, city parks and recreation director, reminded the Council and those present that last year the Council approved a $5 per player user fee for athletic association teams using city-owned athletic facilities, beginning with boys baseball and girls softball, and later applied to soccer and football.

McCage said he has encountered no problems with the fee so far, and called it “a beautiful asset” which has generated about $13,600 in its first year.

But, he said, the parks and recreation board decided some changes had to be made as, “by the letter of the law,” a team which visits Gainesville once for a game must pay about $50 in order to play on the field.

McCage said in most other cities, such as Frisco, Gainesville teams do not have to pay a fee as they are visitors.

He said the board proposed that only teams which play 50 percent of their games on Gainesville city-owned fields would be assessed the fee.

Council members Beverly Snuggs, Woodrow Williams and Jim Goldsworthy had questions about the fee.

“I’m seeing a lot of teams coming to our town and not paying their fees,” Snuggs said.

Mayor Glenn Loch suggested the parks board wait a year and observe its effectiveness.

No one from he public spoke against the user fee.

In other business, the Council voted unanimously to table a resolution allowing the mayor to enter an interlocal participation agreement with the State Cooperative Purchasing Program, which would allow the city to purchase certain items from the state of Texas without having to advertise for bid proposals. The item was tabled due to a lack of information.

In consent items, the Council approved the mayor’s appointment of Robbie Baugh to the parks and recreation board, to replace Pam Johnson.

The Council went into closed executive session at 7:24 p.m.

Following executive session the Council announced it conducted a review of City Manager Mike Land. The Council voted to extend Land’s contract for a year and increase his base annual salary to $105,000, up from the previous $95,000 per year.

Reporter Andy Hogue may be contacted at andyhoguegdr[at]ntin.net

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