Farmington officials may sell more in 2020 Capital Improvement Bonds this month, to free up general funds for unexpected costs related to Coronavirus Disease 2019 (COVID-19).
City Manager David Murphy said during Monday’s remote meeting that while council members had already authorized $4 million, the original plan called for a $3.7 million bond sale. With the full amount, funds can be directed toward the city’s $467,000 share of an Oakland County Water Resources Commissioner Caddell Drain project.
Murphy said COVID-19 costs may include the loss of road funding, 47th District Court revenues, and state revenue sharing, and paying employees for unexpected time off. If federal and state funds come through to cover those costs, he added, the bonds will be used for capital needs.
Mayor Sara Bowman asked about paying off the additional $500,000 in debt; City Treasurer Chris Weber said funds would come from a 2018 voter-approved levy. Repayment of the $3.7 million would come from a combination of water and sewer funds and state road funding, he added.
Weber described bond markets as “volatile”, with interest rates changing daily. “They’re still at a historic low, but there’s uncertainty in the desire to buy municipal bonds.”
Before the April 15 bond sale, Weber said, officials will decide how much of the $4 million to issue. Because bids have been received for a project on Mayfield Street, and a sewer project in the Bel Aire subdivision goes out for bids this week, he said the city will likely issue the original $3.5 million in bonds.
Council members also approved a grant agreement that would cover costs related to Farmington Public Safety’s participation in the Oakland County Narcotics Enforcement Team.