With the passage of the recent bond measure to build a new pool for Newport, the city council must now sit down and prepare a bond package so investment firms and/or wealthy individuals can bid on the bonds. The higher the interest rate that is awarded, the more money these firms and/or individuals profit from the bond sale, and therewith a slight uptick in annual cost to the taxpayers.
It was stated in the voters pamphlet before the last election that an amount required to build a new pool, to be built adjacent to the indoor recreation center, is around 45-cents per thousand dollars of assessed property valuation. The council will be seeking public opinion on how much latitude the city should give on the interest rate. Typically potential bond buyers will throw out a bid on the (in this case) $7.8 million bond to build the new pool. If another company bids at a rate that requires only 43-cents on the tax rolls, city taxpayers will get a break. If the bidding starts at 45-cents or beyond, and the council picks one, that could spell a higher tax on property, city wide. But only a few dollars a year, according to Interim Finance Director Bob Gazewood.
Gazewood told the council that he’s pretty sure the bond tax rate will hover around 43-cents per thousand of assessed valuation, two cents lower than what was speculated on in the voter’s pamphlets. The council recently informally set a tentative high rate limit of .49 cents but of course if the bids come in considerably under that, the city will seriously consider THAT offer as the lowest interest rate. Either way, the annual amount of taxes any property owner will pay will likely be within 10 to 20 dollars a year of what was listed in the voters’ pamphlet in the just-past November election.
This procedure is common practice among Oregon and other cities and counties around the country in that such bonds vary in interest rates on a day to day basis and always have, because they’re set by Wall Street.
The city council meeting begins Monday evening at 6pm at city hall. There will be public comment before and after the bond interest rate setting.
As a postscript, the Parks and Recreation Department will not seek to raise recreation fees for the upcoming fiscal year as it usually does every year. This year’s recreation fees and passes will remain at their current rate as a thank you to the voters for passing the pool bond.
Newport City Council gavels to order at 6pm, Monday, at City Hall.