BRADENTON, Fla. – Birmingham, Alabama’s largest city, is moving forward with discussions to put a $150 million general obligation bond referendum on a special election ballot.
Mayor William Bell is expected to lay out his plan Wednesday for approving the referendum in a work session with the City Council. Bell has also prepared a draft ordinance for discussion.
However, to formally put the referendum on the ballot, the council would have to approve the measure in a future regular session.
If the proposal is ultimately accepted by the council, voters would be asked in a special election Oct. 9 to approve the sale of up to $150 million of GO bonds in six separate questions to pay for landfill, parks and recreation, streets and sidewalks, economic development, public safety, and sewer projects.
Birmingham has a population of more than 200,000. The city is also the seat of Jefferson County which filed for Chapter 9 bankruptcy in November largely because of its crippling sewer debt.
City chief financial officer Tom Barnett said that he does not expect voters will confuse the city’s capital program needs with Jefferson County’s financial problems.
Birmingham’s bonds would be secured by the capacity that is available from a dedicated debt service reserve bond tax that can be levied up to 12 mills.
“This tax can only be used to pay debt service on voted bonds,” Barnett said.
The city plans to sell about half of the bonds next spring. At that time, approximately $255 million of debt secured by the tax will be outstanding, he said.
The bonds are rated AA by Fitch Ratings and Standard & Poor’s, and Aa2 by Moody’s Investors Service.
Barnett said the mayor’s administration has already begun meeting with some of the city’s 99 neighborhood organizations to get input on capital needs.
“All information about the referendum and the projects will be widely communicated by meetings, media, and online,” he said.
