Bond counsel, municipal advisor brief Alpena council on bond process, timeline and costs

Bond counsel and the city's municipal advisor briefed the Alpena City Council on June 2 about the legal and financial steps for a planned municipal bond offering, the timeline for sale and expected costs.

Roger Swatz, bond counsel with Dickinson Wright, described the legal prerequisites, saying the council will first adopt a notice-of-intent resolution that sets a maximum dollar amount for the bonds and a narrative description of what the bonds will finance. "That resolution sets a maximum dollar amount for the bonds. It doesn't obligate the city to borrow that amount," Swatz said, explaining the council will allow a 45-day referendum period after the required newspaper publication before the bonds can close.

Warren of MFCI, the city's municipal advisor, described the financial steps and market mechanics, including preparing a preliminary official statement and seeking a rating from a nationally recognized rating service. "The city currently has an outstanding rating of double A minus from Standard & Poor's," Warren said. He told the council MFCI anticipates the cost to be financed will total approximately $3,000,000 plus issuance expenses, and that the advisor will prepare sizing and structuring options for council consideration.

Swatz outlined the planned sale method: a competitive public offering marketed nationally via a notice of sale in The Bond Buyer with bids received electronically (the transcript referenced Parity and the Municipal Advisory Council). He said the law requires the city to accept the bid with the lowest true interest cost. Warren added that rating outcomes and market conditions affect interest costs and that the municipal advisor will coordinate the rating call and investor outreach.

Council members asked basic questions about how bonds differ from bank loans; city staff and the presenters explained bonds are the statutory method used by Michigan local governments to incur long-term debt and described alternatives such as installment purchase obligations for smaller financings. The presenters said sale logistics would include publishing a notice of sale at least seven days before bidding, using an online bidding platform, awarding based on the lowest true interest cost, drafting closing documents two to three weeks later and closing a few weeks after award.

The presentation did not include a council vote; it served to inform council members of next steps and to request direction to proceed with drafting the notice-of-intent resolution and related documents.

Presenters left contact information and said they would work with city staff on a draft schedule and the preliminary official statement in the coming weeks.