PLA Plans to Sell $185 Million in Bonds With S&P’s A- Rating
June 12, 2014
Public Lighting Authority of Detroit Plans to Sell $185 Million in Bonds With S&P’s A- Rating
Board Revised Plan to Reflect Funding; 15,000 Lights Will be Added to Reflect Community Input
DETROIT-The Public Lighting Authority of Detroit (PLA) expects its A- rating from Standard and Poor’s Rating Services(S&P) will allow it to sell in excess of $180 million in bonds, more than $20 million than anticipated, to fund the plan to restore reliable street lights to the city of Detroit.
“The sale of these bonds will mean that we will be able to continue uninterrupted our work to restore reliable street lights to the City during the next two years,” said PLA CEO Odis Jones. “It also means 15,000 more lights for residents, bringing our total number of lights to 64,500 LED’s. We’re excited to be able to install more lights than we originally planned.”
The $185 million in bonds marks the second step in the bond sale process. The initial sale of$60 million in bonds took place in December. The current bonds will be used to pay off the initial bonds sold as well as providing funds to finish the city’s street lighting system.
The bonds will be issued by the Michigan Finance Authority (MFA) and are expected to sell by July 1. By statute, the PLA can only issue bonds through the MFA.
The bonds will be paid off with proceeds from a portion of the utility tax that has been appropriated by public act 392. The law passed by the Michigan Legislature in December 2012 creating the PLA directed $12.5 million in city utility tax annually for the purpose of paying of bonds that are issued. A ruling issued in December of 2013 by U.S. Bankruptcy Judge Stephen Rhodes, declared that the PLA is a separate municipal corporation from the city of Detroit and in accordance with bankruptcy code 364(e) that ensures all debt secured by the PLA shall be irreversible and therefore the PLA funds will not be affected by the city of Detroit’s bankruptcy filing.
S&P’s rating considered the Judge’s ruling as an enhancement to the PLA’s bonds.
The PLA board Wednesday revised its current plan to further refine the design criteria and budget for the plan moving forward. Using feedback from residents in the pilot areas, the PLA has adjusted its plan and will be adding 64,500 LED street lights-30 percent more lights than it had anticipated-to address concerns raised by residents that there wasn’t enough light. The PLA will follow up to redo the areas to this new standard as the PLA moves forward to the completion of the project.
Blocks 701 feet and longer
All blocks that are longer than 700 feet will have two or more mid-block lights, spaced evenly across the block.
Blocks 300-700 feet long
All blocks that are 300-700 feet long will have one light in the middle of the block.
Blocks 300 feet and below
If there is an existing mid-block light on block and it is working, it will remain until it burns out, at which point the light and all unnecessary equipment will be removed. If this is an existing mid-block light and it is not working, the light and all unnecessary equipment will be removed and not replaced.
ZIP Code Schedule Changes
The PLA board has revised the construction schedule and was prioritized in the following order:
- Neighborhood streets
- Street lighting
- Thoroughfare lighting
- Highway service drive lighting
Thoroughfares will be prioritized based on traffic counts. The thoroughfare streets are:
- Grand River
- Outer Drive
- Michigan Avenue
- Eight Mile
About the Public Lighting Authority of Detroit
The PLA was authorized by the Michigan Legislature in December 2012 and approved by Detroit City Council earlier in 2013 to design and implement a plan to improve Detroit’s public lighting system. The PLA is governed by a five-member board, all Detroit residents, appointed by the Mayor and the City Council.