City of Beatrice to issue revenue bonds for new landfill

BEATRICE – The City of Beatrice will issue revenue bonds of up to $16 million to finance construction of a new landfill, south of the present facility. The proposal was approved by the city council and Beatrice Area Solid Waste Agency Board Monday night. The bonds will be paid through fee revenue of the operation, with general tax revenue as a backstop if needed.

Financial consultant Jay Spearman of Piper Sandler, working with the city on the issue, explained the backing of the bonds with general taxes.

"By having that general obligation backing authority, for the repayment of these...as well as the revenues generated by the operation of the landfill, there's about a hundred basis points difference in that. When you're looking at $15 million, up to $16 million paid back over a 25-year period that hundred basis points or whole percentage point difference in interest rate, equates to about $3.5 million in interest expense. That's why the general obligation backing by the city, even though you don't intend to use it, ultimately benefits the BASWA agency by being able to obtain a lower interest rate."

City Administrator Tobias Tempelmeyer says bids are being sought for the earthwork and construction of a building and scale house. Spearman anticipates the bonds issued would be rated double-A, given the low debt level of the city and a healthy cash reserve.

"We would precede with the rating later this month or the beginning of 2025..and then potentially market the bonds later in January of 2025 and closing in February, for the first issuance. When you have bids back for the actual building itself, then you could move forward with the second issuance in the spring."

Spearman says the interest rate on the bonds would be up to 6.5%, though he said if issued today, the rate would be closer to 4.5%. Refinancing would be possible, if needed, after five years.

The city’s current landfill is expected to run out of space by next October. Years ago, the city purchased property south of the facility for the purpose of building a new solid waste landfill. It is located to the west of a construction and demolition waste site operated by the city.