By Patricia A. Scheyer
NKyTribune reporter
Florence City Council heard a presentation this week about the ins and outs of the city offering the Boone County PeeWee Athletic Association, Inc., a loan to be able to replace the synthetic field, as well as the high pressure stadium lights for a total price of just under $600,000.
“About six months ago, officials from Boone County PeeWee Football approached us seeking the possiblity of the city providing financial support initially through bond financing, sort of like industrial revenue bonds, but a little bit different,” said City Administrator Joshua Hunt. “We evaluated that in depth, ends up it is really too expensive to go through the process, and as we know when we do industrial revenue bonds, the project has to be about $5 million in order for it to make sense.”
He added that with all the fees and complexities that came with it, they decided that bond financing was out.
Then the Association asked for a traditional time loan, and Florence referred to KRS 82.082 which said public funds can be used for the furtherance of public purpose, and the PeeWee Athletic Association fit the bill for public purpose, since they have been hosting sports for kids since 1969.
Hunt reviewed a preliminary term sheet outlining an estimated breakdown of payments, excluding closing costs and additional fees. The proposal suggests a 10-year balloon payment-type loan amounting to $573,349.80, featuring a fixed 3 percent interest rate. The monthly payment is projected to be $3,179.79, with a balloon payment of $332,483.30 due upon the loan’s expiration. The loan term is ten years, utilizing a 20-year amortization schedule. The estimated total interest at the end of the ten-year term is $137,528, assuming a consistent monthly payment throughout.
He said the reason they chose a balloon loan is that no one would do a 20-year loan for a synthetic field that has a life expectancy of 10 years.
“What their intentions are, in speaking with them, they’ll make a monthly payment, and then once a year, say in August, they’ll make a lump sum payment on top of the monthly payment, say $30,000 or $40,000,” Hunt explained. “Whatever the lump sum may be in an effort to when it gets to year 10 then the loan matures, the lump sum amount that’s due at the end of the term isn’t so significant and they will be able to pay it off.”
Hunt emphasized that this is not a normal thing for the city to do, and stressed that they are not a bank, they do not provide loans, but what makes this transaction a little different is that there is a hard asset tied to the loan.
There are some conditions if they accept the loan. The land at 1 Gridiron Lane consists of 10.15 acres of land, all paid off, but of the three tracts of land involved, 5 acres are in unincorporated Boone County. The city wants those five acres to be in the city of Florence, so they will be annexed.
The other condition associated with the loan would be that if the association would decide they didn’t want to exist anymore, they would have to convey the assets to a municipality, and due to terms of the contract, that municipality would be the city of Florence.
Chris Gunkel, who has been vice president of the Association and will assume the president’s seat as of the first of January, got up to speak on behalf of the Association.
“So as previously stated by Josh, we have been in this community since 1969,” he stated. “We have been a cornerstone, a pillar for the youth in our community for longer than I have existed. We are heavily involved in youth sports; we were formerly known as the Boone County PeeWee Football league, where we focused on football, tackle football, and cheer. Since then we have advanced. We have a spring flag football season, which starts in March and is usually done before Memorial Day.”
He added that they have started a baseball program. In the first season they had four teams, and last year they had 7 teams. They also have a wrestling program this year. They have 40 wrestlers currently competing. So far, they have 35 medals from two competitions.
He said they have a mission behind their sports. They try to advocate being one and 0, in everything they do.
“You may lose, we know this,” he said. “It’s about the next play, it’s about the next opportunity. We instill this in the youth, so that by the time they get to be our age, they are effective in the community.”
All six council people made statements in support of the Association, and most remembered times they had with the sports or the teams. Gunkel said they let every child play who wants to. If they can’t afford it, or don’t have their cleats, they work something out so that the child can play.
CAO Hunt said the next steps are annexing the property, and City Attorney Thomas Nienaber is working on the documents for the loan now.
Hunt also said that during the months they were in discussions, Police Chief Tom Grau was the one who was putting this deal together, always pushing to get it done.
Mayor Julie Aubuchon recalled that she cheered for the football teams for eight years, and it is an association that is near and dear to her heart.
“I think this is a home run to support youth sports,” she said.”I salute you all, and thank you for coming.”