Due to the state of the economy, the City of Parkville reissued its debts related to the two troubled Neighborhood Improvement Districts (NIDs) near the new Creekwood development on the western edge of the city.
At the Tuesday, June 2 meeting of the board of aldermen — held via the Zoom app and plagued with technical difficulties due to internet problems at city hall — the board took several tries to approve the reissuance.
Late last week, the city issued a press release on the reissuance, and reduced NID interest costs, which city officials say will save taxpayers more than $1.3 million.
“Because of a favorable low interest rate environment, on April 21 the board of aldermen authorized a competitive bond sale,” according to the release. “The bond sale was held on June 2 and resulted in a bid of lower interest rates and the savings. As a result, the existing bonds will be refunded and reissued at a lower interest rate.”
At the June 2 meeting, aldermen felt the savings was significant enough to order a press release. Also on June 2, aldermen Tina Welch, Dave Rittman, Bob Lock and Marc Sportsman were re-elected to the board, with all but Sportsman beating out challengers to their seats.
In 2014, the city issued bonds to construct sanitary sewer improvements for the Brush Creek Drainage Neighborhood Improvement District and road improvements for the Brink Meyer Road Neighborhood Improvement District. Both NIDs, located in western Parkville near Interstate 435 and Highway 45, were created in 2006 under the Neighborhood Improvement District Act by a petition of at least two-thirds of the owners of record of all the real property located within each district’s boundaries.
The property owners petitioned to assess themselves for the costs of public improvements that would benefit their properties.
Unfortunately, in the years after the creation of the NIDs, the economy tanked and most properties in the area reverted to bank ownership, leading the city to search for options to redevelop the area and attempt to recoup costs.
Both projects are funded through annual assessments made by property owners within each NID and through transfers from the city’s general revenue budget. “Property owners and the city’s general budget will benefit from the interest savings, which will average approximately $97,000 per year until 2034,” according to the release. “In 2019, the city also entered into a real estate sales agreement to sell property it obtained from foreclosure proceedings within the two NID districts. The agreement calls for the payment of $6.4 million to the city over the next 15 years.
“The interest savings, and proceeds from the land sale, will result in significant annual budget savings for the city and enable it to increase funding for other neighborhood capital improvements in the community, including street, storm water and public safety improvements.”
The city’s financial adviser Baker Tilly presented the outcome of the bond sale to the board June 2. The refinancing, $3,995,000 for the Brush Creek Drainage Bonds and $2,730,000 for the Brink Meyer Road Bonds, were issued at an average interest rate of 1.8 percent. Standard & Poor’s Rating Agency also affirmed the city’s AA credit rating.
The Creekside development is now under construction in the NID areas and features a competitive baseball complex set to begin operations this week, as well as retail, residential and more was approved last year.