New Orleans soon will begin making repairs to more than two dozen parks and playgrounds and will spend more than $42 million on street improvements after the city this week sold the final $65 million of general-obligation bonds authorized by voters in 2004 as part of an overall $260 million bond program, Mayor Mitch Landrieu’s office announced Friday.
The bonds will finance 46 projects in all. In addition to streets and parks, they will include upgrades to police and fire stations and libraries.
“The success of this week’s bond sale is validation of our hard work to not only stabilize the city’s financial position but put us on a path toward prosperity,” Chief Administrative Officer Andy Kopplin said.
Debt service on the new bonds will be supported by property taxes.
The new bonds “attracted favorable attention” from the market, Landrieu’s office said, and received ratings of A3, A- and A-, respectively, from Moody’s, Standard & Poor’s and Fitch Ratings.
Moody’s A3 is its seventh-highest rating category, near the bottom of its “investment grade” ratings. A Standard & Poor’s rating of A- signifies a “strong capacity” to meet financial commitments but some susceptibility to “adverse economic conditions and changes in circumstances.” The A- from Fitch indicates “high credit quality” and denotes an expectation of low default risk.
All three of the major rating agencies recently improved their assessments of the city’s finances.
Standard & Poor’s upgraded its rating to an A- from a BBB+ and gave the city’s finances a positive outlook. Although their ratings did not change, Moody’s and Fitch improved the outlook for the city’s debt from “negative” to “stable.”
The city had expected the improved credit rating to bring a better interest rate for the bonds.
The bonds sold for an average rate of 4.217 percent. Principal repayment will begin Dec. 1, 2016, and the new bonds will be fully paid off by December 2044.
The city estimates that taxpayers will save $4.2 million in debt service over the life of the bonds, or about $140,000 a year, because of the improved credit ratings.
“By restructuring, rebuilding and reviving the city’s finances, we are taking full advantage of our improved credit rating and economic growth,” Landrieu said.
Nearly two-thirds of the bonds will pay for repairs to major, minor and arterial streets.
The largest chunk, $31 million, will be put toward repairing minor streets. The streets to be repaired include sections of Melodia Court, Cartier Avenue, Gardena Drive, Old Spanish Trail, West End Boulevard and Homedale, Milne, Camp, Leontine, Valmont, Gravier, South Johnson, Octavia and Vienna streets.
The $3.5 million to be spent on major streets will go toward repairs to Jackson Avenue and to Michoud Boulevard between Chef Menteur Highway and Dwyer Road.
The $7.1 million for arterial street repairs will go to St. Bernard Avenue between Filmore Avenue and Robert E. Lee Boulevard, and to Wright Road between Chef Menteur Highway and Dwyer Road.
The city also will spend more than $7.5 million to make improvements to 28 playgrounds and parks overseen by the New Orleans Recreation Development Commission, including Hardin, Goretti, Kenilworth, Pradat and Taylor.
About $1.6 million is slated to go to the New Orleans Public Library for security gates and cameras, a learning lab and homework help center, replacement of air conditioning systems and improvements to the main library on Loyola Avenue.
The New Orleans Police Department’s 2nd and 4th District stations will receive $2.2 million and $100,000, respectively, while the Fire Department’s Engine 33 and 40 firehouses will receive a total of $50,000. Just over $360,000 is also planned for roof repairs at fire stations.
Other recipients will include the Audubon Commission, $400,000 for improvements to The Fly, the recreation area along the river; the City Park Improvement Association, $700,000 for a conservatory and plaza expansion; and Kopplin’s office, $8.3 million for energy management.