The city of Orange has sold $5 million in bonds to pay for improvements in the water and sewer department. City Council has gone through the processes to issue and sell the certificates of obligation, a kind of bond that does not require a vote. The bonds will be paid back over 20 years through income from water and sewer customers.
Tuesday, Jim Gilley with U.S. Capital Advisors, who handled the bond issuance and sale, praised the city for getting a low interest rate because of an AA- rating by Standard and Poor. The S&P website says AAA is the top rating. An AA “differs from the highest-rated obligation only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong.”
The rating “saves you a bundle of money because of a better credit rating,” Gilley told the council.
The rating came because of the city’s low debt obligations, which Gilley said is “only 5 percent” of the city’s budget. In addition, the city has “very strong liquidity” with savings and cash on hand. The only weakness listed by Standard and Poor was a weak local economy. Gilley told the council that is “beyond your control.”
In other business, the council conducted a public hearing to annex 5.3 acres of land along Highway 62 north of Interstate 10. The annexation has been requested by the property owners so a Blue Beacon Truck Wash can be built. A representative from Blue Beacon said the construction will be worth $2.7 million and the business will have about 50 employees.
The city will have two readings for an annexation ordinance and then go through a re-zoning process because all newly-annexed land immediately comes into the city with a residential zoning.
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