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City awards sale of $2 million in general-obligation bonds at about 3.29% to finance street work
Summary
The Farmington City Council on Sept. 2 adopted a resolution awarding the sale of Series 2025A general obligation bonds to the low bidder after receiving eight competitive bids; Standard & Poor’s affirmed the city’s AA+ rating with a stable outlook.
The Farmington City Council on Sept. 2 voted unanimously to adopt an updated resolution awarding the sale of its Series 2025A general obligation bonds to the low bidder, a sale city staff said will finance 2025–2026 street reconstruction projects.
City staff introduced the item and Tammy Emdahl of Northland Securities presented the results of a competitive sale conducted that morning. “The low bid was from Piper Sandler out of Minneapolis at 3.28 and that got adjusted to 3.29 with final structure,” Emdahl said, adding that eight bids were received and all yields were under 4 percent.
The sale followed a recent rating review: Standard & Poor’s reaffirmed Farmington’s AA+ rating with a stable outlook, a factor Northland cited as helping secure favorable interest rates. Emdahl said premiums offered by underwriters reduced the par amount of the bonds and produced the final yield; she reported a final par amount of roughly $2,000,002.09.
City staff said the bond proceeds will fund the city’s 2025 and 2026 street reconstruction programs. Emdahl noted that bond counsel Dorsey provided a final resolution to the city the afternoon of Sept. 2; she and staff recommended adopting the updated resolution awarding sale to the low bidder.
Council discussion focused on the rating and market results. “The double A plus, for our city and our characteristics and the way we manage our finances so well, it is a pretty darn strong rating, correct?” Council member Steve asked. Emdahl replied, “That is absolutely correct,” and said the spread between AA+ and AAA is narrow and would amount to only a few basis points in interest over the life of the bonds.
Council member Nick moved to adopt the updated resolution authorizing issuance and sale of the Series 2025A general obligation bonds as presented; Council member Steve seconded. The clerk called the roll; Council members Gordis, Bernat, Lean, Wilson and Mayor Hoyt voted yes and the motion passed.
No amendments to the resolution were proposed during the meeting, and staff did not identify additional contingencies beyond those reflected in the final resolution provided by bond counsel.
Financial and procedural details discussed at the meeting included: number of competitive bids (8), underwriters identified in the sale report (Piper Sandler as low bidder, R.W. Baird as the cover bid, and a higher offer from Brown Stone), S&P’s AA+ rating with a stable outlook, and the reported final par amount and final yields derived from premiums and coupon structure.
The resolution adopted at the meeting authorizes the city to issue the bonds and to deliver and accept the low bid as presented by Northland Securities; bond counsel and the city’s financial adviser will finalize closing documents and schedules.
