By JESSA PEASE / Staff Writer

PELHAM— The city of Pelham will enter into a 25-year bond agreement after a decision by the City Council Dec. 18. The council unanimously authorized financing of an about $11.4 million bond, which will be utilized in the Pelham Park Middle School project.

“From what I understand and have seen it was a very, very successful sale, and a primary reason for the successful sale is the AAA rating of the city,” said Rod Kanter, Pelham’s bond counsel with Bradley Arant.

This transaction is part two of an overall plan that started last year, according to Kanter. He said the company approved funding for the public school improvements within the city.

The warrants that were approved were for the principle bond amount of $11.4 million. Kanter explained that the agreement is for a general obligation bond, or a bond issued with the belief that the city will be able to repay its debt through taxation or revenue from projects. No assets were used as collateral.

The sale occurred Dec. 17, and the bonds are payable over a term extended through 2040. Hayes said the bond will be paid back through the 1-cent sales tax in Pelham.

“It was a very successful issue,” said City Council President Rick Hayes. “We are happy with where the rates came in.”

Pelham was locked in at an interest rate of 3.5 percent, which is less that Hayes said he had expected.  He said he was thinking the rate would come in between 3.52 to 3.55 percent.

The funds will be used mostly for the Pelham Park Middle School project, according to Hayes, which is scheduled to open August 2017.

“This is a huge step for us and we are very, very appreciative,” said Board of Education President Rick Rhoades.

The City Council and Mayor Gary Waters will sign all the financial and closing documents Dec. 30.