BLYTHEWOOD – Blythewood town leaders are looking for more flexibility in how the town repays debt.
The town took the first step toward that goal at its June 27 meeting, approving first reading of an amendment to the town’s installment purchase plan ordinance relating to capital improvement projects.
Specifically, the amendment would revamp how the town repays bonds associated with Doko Meadows Park and Doko Manor.
Blythewood currently pays this debt in set percentages from the general, hospitality tax, and local accommodations tax funds.
The amendment as proposed would allow payment from any fund in any percentage with council approval during the budget process.
“During the budget discussions this year, council requested the town have more flexibility in how it makes its bond payments, in terms of the source of the fund it comes from and the timing,” said Town Administrator Carroll Williamson. “To accomplish this, an amendment to the ordinance was required.”
Bond attorney Ray Jones, who drafted the amendment, said the ordinance is reflective of Blythewood’s growth as a town and financial strength.
The bond, called the Blythewood Facilities Corporation (BFC) bond, was taken out in 2010 under the Keith Bailey administration as a way to finance the construction of the Doko Park and Manor as well as other park facilities.
“At the time Blythewood did this financing, it was one of the smallest municipalities in South Carolina to earn a bond rating,” Jones said.
He said the initial bondholder required payments in set percentages from specific funds, citing the town’s previously limited resources. The bondholder asked that the town’s hospitality and accommodation tax be first set aside to make payments.
Jones said circumstances have since changed.
“I’m glad to tell you because of the town’s financial strength and the way it’s repaid the bond, the current holder of the bond is glad to release the condition.”
Despite the town’s size, Blythewood still had an “AA” credit rating when the bonds were first signed, which Jones called “distinctive” for a town with under 10,000 residents.
When the bond was refinanced in 2018, it totaled a little more than $5.4 million – counting principal and interest – with an interest rate of 3.65%. Annual debt service payments became $318,601, according to council documents.
As of June 2022, the projected bond balance is about $3.25 million. The bond is set to retire in June 2035, documents state.
Adopting the ordinance would allow the town to draw upon other funding sources to repay debt, which increases overall budget flexibility.
Councilman Donald Brock asked Jones if there is a prepayment penalty for paying the bond off early. Jones said there is not and the debt could be repaid at any time.
Once the ordinance passes, the final step is to seek final signoff from the Blythewood Facilities Corporation, Jones said.
