Birmingham plans to issue $40 million in warrants to help pay for an enhanced, faster bus system, a landfill expansion and other capital improvement projects.

The Birmingham City Council approved the issue of general obligation warrants at its regular meeting on Tuesday.

Warrants are similar to municipal bonds in that they are a debt security issued by the city. The city, though, can issue warrants with city council approval while bonds require voter referendum.

The warrant issue will provide funding to several capital projects, including:

More than half of the warrant issue will help funding the creation of a bus rapid transit system in the city. According to the city, $20 million of the warrant will be allocated to matching a Federal Transit Administration grant for the construction of designated bus lanes and 36 new bus stations.

Another $1.75 million from the warrant will also go towards the massive project slated to be completed in time for World Games 2021.

Bus Rapid Transit is an enhanced transit line designed to give low-income residents a quicker commute to Birmingham's city center. BRT will connect 25 neighborhoods along a 10-mile stretch from Five Points to the west to Woodlawn in the east.

According to the city, the buses will operate in both dedicated lanes and in mixed traffic. Buses will operate on 15-minute frequencies for much of the day. Buses will be able to communicate with the traffic signal system allowing it to keep the traffic lights green.

According to the city, $7.5 million will be allocated to the building of a new cell to expand the Eastern landfill to accommodate the city's garbage.

A year ago, then-Birmingham Public Works Director Stephen Fancher said the city would reach its maximum capacity at the New Georgia landfill sometime in early 2019. The city would need to then start sending garbage to the Eastern landfill.

A cell is a designated area where land will be prepared for trash disposal.

Fancher said construction on the new cell would need to start this summer.

In November, the Birmingham City Council approved entering into an agreement with U.S. Steel to pay up to $4.6 million for some site work to prepare 40 acres south of Barber Motorsports Park for a high-tech industrial park.

The city's contribution to the project will be paid for with the warrant issue.

In the deal, U.S. Steel will deed 24 acres near the site over to the city for the relocation of the Southern Museum of Flight.

The city's investment will pay for the construction of a partial road and grading of the property, according to the development agreement. U.S. Steel would actively market the 40-acre site for industrial users.

The property is located off Interstate 20 in the Grand River area near the Bass Pro Shops and the Outlets of Grand River in Leeds.

Another $2.25 million of the bond issue will go towards improvements at Legion Field. These improvements include: replacing the field turf, repairs to light towers, install a new scoreboard at north end zone, seating repairs and replacement, security upgrades and barriers at entry points,

According to the city, $750,000 from the warrant will be spent on improvements to Boutwell Auditorium. Those improvements include: ADA upgrades, flooring replacement, painting and seating repairs and replacement.

Another $1.5 million will go towards replacing the escalator at the Birmingham Public Library central branch downtown with stairs.

The Birmingham library in Wylam needs to be replaced at a cost of $1.5 million, according to the city. About $800,000 of that project will be paid for through the warrant.

And, another $600,000 from the warrant will go towards construction of basketball courts at Birmingham Crossplex.

According to the city, the warrants will be repaid over 25 years. Principal and interest payments will be about $1.4 million in 2019 and $2.4 million each year through 2043. The payments will be made from the general fund.

The anticipated interest rate is approximately 3.68 percent. The warrants should have no effect on the city's credit rating as the rating agencies are expecting it, said Birmingham finance director Tom Barnett.

The Birmingham City Council on Tuesday also approved refinancing $40 million in Series 2007A Bonds general obligation bonds. The projected savings from the lower interest rate is $7 million, with a net present value of $5.5 million.

The savings will remain in the bond reserve fund to be used for any future bond issue. Principal and interest payments will be over the same period as the outstanding bonds through 2033.