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You are Viewing an Archived IssuePosted: 06/24/15
WT approves bond sale
for infrastructure projects
by JERRY FRAEYMANWashington Township officials have approved the sale of $15 million in bonds to fund several major water and sewer infrastructure projects in the township.
Observer Special Writer
The Washington Board unanimously approved the sale at their Wednesday, June 17 meeting. Trustee Abby Jacobson was absent.
Money generated from the sale, which will take place in August, will be used to pay for a water sewer treatment plant, a water storage facility, water lines near the new community center, and a main trunk sewer line.
The treatment plant, storage facility and community center are all situated on property located between 30 and 31 Mile roads, west of Powell Road.
Work on the water storage facility is already underway, with walls expected to be raised in the coming weeks.
At last Wednesday's meeting, Patrick McGow, the township's bond attorney from the firm Miller Canfield, explained the bond selling process.
McGow said the bond issuance is the second step in the bonding process.
The first occurred in January 2014, when the board expressed a notice of intent by approving the future sale of bonds up to $25 million.
Last week's vote was the board agreeing to actually sell bonds on the open market at a value not to exceed $15,205,000.
Money from the sale can be used for any and all costs related to design, engineering, construction and legal efforts, as well as internal costs, related to any of the infrastructure projects going back to November, 2013.
Sale of the bonds will be conducted via a competitive bid process overseen by Bendzinski and Company, the township's municipal advisor.
Robert Bendzinski said the sale will take place in early August and should be finalized by the end of August, at which point the township will receive proceeds from the sale.
The bonds will be sold at a competitive public sale, with bids submitted via the internet.
Given the dollar amount of the sale, Bendzinski said he expects offers to come from regional as well as national parties.
Bendzinski said that, under state law, the township must accept the bid of the firm offering the lowest net interest cost to the township.
Determining the lowest net cost involves a range of factors, Bendzinski explained, including whether the prospective purchasers are bidding a discount or premium price, as well as the rates they assign to the different sets of bonds.
The bonds will be issued with maturity dates ranging from 2017 through 2035. Rates for each set of maturity dates will be fixed for the life of the bonds.
Bendzinski expects the average interest rate on the bonds to be under 4 percent.
McGow explained to the board that the bonds being issued are limited-tax, general obligation type bonds, which means the township is pledging its "full faith and credit" toward payment.
McGow said doing so reassures purchasers and generates lower interest rates, as well as lower issuance costs, for the township.
The township plans to use water and sewer revenues to pay off the bonds, but McGow said Washington could use any source of money or revenue.
Township Treasurer Linda Verellen asked who had access to the internet-based bid system and if there was any risk of someone hacking into the site.
Bendzinski said only has firm had access to the submitted bids, but he offered Washington trustees the opportunity to be on hand when the bids are opened or to join via conference call.
McGow said, in the 10 years the online system has been used, he does not recall an instance of hacking or security breaches. He said the bidding system being used is the most widely-used platform for these kinds of transactions.
Bendzinski said the system is endorsed by the State of Michigan and, other than the bidder's name and bid amount, doesn't contain any critical, hack-worthy information.