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Reedsburg council approves parameters to sell up to $3.225 million and $1.62 million in general-obligation notes
Summary
The Reedsburg Common Council adopted two parameters resolutions allowing city staff to sell up to $3,225,000 in tax-exempt general obligation promissory notes and up to $1,620,000 in taxable general obligation promissory notes tied to Tax Increment District 11 projects and a Lands’ End building purchase.
The Reedsburg Common Council on March 24 adopted two resolutions authorizing the issuance and establishing sale parameters for two general-obligation promissory note issues: a not-to-exceed $3,225,000 tax-exempt issue and a not-to-exceed $1,620,000 taxable issue.
The two financings combined will fund a mix of city and Tax Increment District (TID) 11 purposes, including the purchase of the Lands’ End building, a roundabout on Viking Drive/Nineteenth Street tied to TID 11, land acquisition for development inside TID 11, and a $50,000 developer incentive linked to a proposed movie theater. City staff said the taxable issue is required because portions of the financing are for private development and therefore cannot be issued tax-exempt.
Carol (presenter) summarized the structure and timing, saying the taxable notes will be sized to include issuance costs and one year of capitalized interest for 2026 so no debt service will be due that year. She told the council the tax-exempt notes will carry lower interest rates and that principal repayment for the tax-exempt portion will begin in 2026 through 2043, while the taxable portion is amortized between 2027 and 2037. Carol also noted the city’s Moody’s rating is A1 and outlined a timeline: a Moody’s rating call on April 22, a planned day to take bids on April 30, and expected delivery of funds on May 19.
Why it matters: The financings help the city acquire property and support public infrastructure work while preserving the intent to have TID 11 increment offset the levy impact over time. Council members pressed staff on timing, the rationale for separating taxable and tax-exempt purposes and how proceeds will be applied.
Key details: The taxable issue is sized to “not to exceed $1,620,000” to allow for variability in interest rates and underwriter fees; the tax-exempt issue is sized to “not to exceed $3,225,000.” Carol said the taxable issue includes a $50,000 developer incentive tied to the theater project and that interest for 2026 is being capitalized because tax increment will not be available that year.
Council action: The council approved the parameters resolutions by voice/roll-call votes. For the $3,225,000 tax-exempt parameters, the motion was made by Caney and seconded by Knutson; for the $1,620,000 taxable parameters the motion was made by Knudson and seconded by Moon. Both measures passed.
Context and next steps: City staff and the city’s bond counsel will prepare an official statement and notice of sale and seek bids from underwriters. If bids come in within the resolution parameters, the city administrator or finance director has authority to award the notes the day of sale.
Quotes: "So the council's giving that authority by the adoption of the parameters resolution as long as the final sale results come in within those parameters listed in the resolution," Carol said when summarizing the authority the resolutions confer to staff.
Ending: The council approved the resolutions to proceed to market; staff will return with final sale results if bids are awarded and will report back on closing details once the transactions are completed.
