Council approves early payoff of 2006 water bonds

The Common Council voted Tuesday to authorize staff to pay off the city's 2006 water bond early using money in the city's debt reserve account, officials reported. Rosie, a city staff member who presented the item, said the payoff amount is $186,000 and that early retirement of the bond would save the water utility about $198,000 compared with continuing on the existing schedule. The council's approval matters because it reduces the city's outstanding debt for the water utility and will free funds the utility can apply to its operating needs, Rosie said. City staff confirmed the legal and banking checks needed to proceed: Marsha reviewed the bond counsel's paperwork and the city's accountant, Buzz Groen, confirmed available funds in the debt reserve account. Rosie told the council that Ice Miller, the city's bond counsel, and the city's bank had reviewed the payoff, and staff recommended moving forward. A member moved to approve paying off the bond early and another member seconded the motion; the motion passed unanimously. Discussion: Council members asked staff whether payoff required additional approvals from counsel or the bank. Rosie and staff said those checks had been completed and that paying early would reduce the water department's future interest costs. No alternative financing or offset was proposed during the discussion. Decision/direction: Council formally authorized staff to complete the early payoff. Staff will coordinate with bond counsel and the bank to execute the transaction and apply the savings to the water utility's financial plan. The council recessed to other business after the vote. Staff thanked Buzz Groen and Marsha for their assistance and the council for the approval.