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City considering stimulus bonds

September 02, 2009|By ANDREW SCHOTZ

HAGERSTOWN -- As part of an $18 million bond issue, the city is considering a federal stimulus option that could cut interest costs.

The Hagerstown City Council agreed Tuesday to divide the 20-year bond issuance into an A series of $7.23 million and a B series of $10.77 million.

The A series, covering the first 10 years, would be traditional tax-exempt bonds, said Alfred Martin, the city's finance director.

For the B series, covering years 11 through 20, the city could issue Build America Bonds, which were authorized under the American Recovery and Reinvestment Act of 2009.

Build America Bonds are taxable, but the city could get a rebate of 35 percent of the interest cost.

Martin said the B series also could be traditional tax-exempt bonds.

He said the city will get bids for the bonds on Sept. 15, then decide which bonds to issue, depending on the market.

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The city will use bond-sale proceeds for a lengthy list of projects outlined in the bond resolution. The list includes $8.4 million for general-fund projects, $5.3 million for water projects, $4 million for sewer projects and $150,000 for work on the North Potomac Street parking deck.

Some of the largest individual general fund projects costs are $1.29 million for the widening of Eastern Boulevard, $1.25 million for the expansion of Washington County Free Library and $1.09 million for the reconstruction of Jonathan Street.

Another $96,000 is included to cover the cost of issuing the bonds.

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