City takes first step to approve $200 million dollar bond

The city commission gave initial approval Thursday night to the issuance of a $200 million industrial revenue bond to finance the construction of the Southwest Cheese Plant.

A special commission meeting will be held May 13 to give final approval to the bond, commissioners said.

The proposed bond purchase agreement is designed to give Southwest Cheese officials freedom from property taxes and some savings in sales taxes. The proposed agreement is part of an incentive package the city is offering Southwest Cheese, said city attorney Dave Richards.

Under the proposal, the city of Clovis would have no financial liability for the bond issuance, although it would technically own the property during the life of the bonds, he said.

According to the purchase agreement, the Bank of Albuquerque will issue the bonds in the city’s name, but the full amount of the bonds will be purchased by Cheese IRB Purchaser, a subsidiary of Southwest Cheese especially created for the purchase. The city will lease the property and the plant to Southwest Cheese, with the lease amounts equal to principal and interest on the bond.

Under the agreement, Southwest Cheese could eventually own the plant through a lease/purchase arrangement.

In other business, City Manager Ray Mondragon said that in the 2004 fiscal year the city will divide $1.1 million of the 1/4 percent gross receipt tax approved by voters in March among streets, police, the fire department and the Ute Water Pipeline project.

He said $600,000 will go to streets, including the purchase of a paving machine; $125,000 will be used for new police vehicles; $150,000 will be used for ambulances and fire vehicles; and $125,000 to the Ute Water Pipeline Project.

City Commissioner Kevin Duncan asked if, as a result of using the gross receipts tax money, the city could transfer any of its budget money to employee salaries. City Finance Director Don Clifton said Clovis gross receipts tax collection has increased enough that the city probably won’t have to transfer money for salaries.

The commission approved a contract with Ter-Les Mowing for weed-cutting services, but Mayor David Lansford said the company needs to do a more thorough job of cutting weeds and city residents need to be more responsible about litter.

“Clovis sends a strong, non-verbal message by the way it looks,” he said.

Also, the commission commended the drill teams of Clovis High School, Marshall Junior High School, Yucca Junior High and Gattis Junior High, which won top honors at the Santa Fe Dance Classic March 13.

The Clovis High Wildcadettes won “Best In Class” — the top award — plus seven other awards. Marshall’s Kitten Magic won “Best In Class” and 12 other awards, out of a possible 13. Kitten Magic also won the competition’s academic award, with a cumulative G.P.A. of 3.8.

The Gattis Bear Essentials won “Best In Class” runner up and seven other awards, and the Yucca High Chaps won “Best In Class” runner up and seven other awards.

The commission also heard a rap song on the importance of picking up litter from four students from James Bickley Elementary.