Moorhead approves short-term 2025 bond sales for mall redevelopment and improvement and wastewater refunding

The Moorhead City Council approved two separate bond resolutions that clear the way for the city to sell 2025 general-obligation bonds, municipal advisor Chris Hogan told the council during a presentation.

Hogan, director at Baker Tilly and the city’s municipal advisor, said the city will sell $11,560,000 in general obligation temporary improvement bonds, series 2025A, to finance improvements in the mall redevelopment area and to provide short-term capital until longer-term financing is arranged. He said the 2025A issue is structured as a three-year financing with capitalized interest.

Hogan said the city will also issue $16,575,000 in general obligation improvement and wastewater refunding bonds, series 2025B, to fund various city improvement projects and to refund certain wastewater bond maturities from the 2014 series. He said the B bonds include pledges of special assessments, tax levies and wastewater treatment fund revenue; he gave an assessment pledge amount of $3,960,198 and said the remaining debt service will be paid by a tax levy starting in 2026.

Hogan explained the refunding portion restructures outstanding wastewater debt to provide near-term debt-service relief for the first five years without increasing overall interest cost, and that part of the reason for the refunding was changes in revenue following Anheuser-Busch leaving the city. He said the 2025B bonds are structured with 20-year repayment and the bonds include a 10-year optional call; the 2025A bonds include an optional call provision after one year to preserve flexibility.

Council approved the two items separately by voice vote; council records show the motions carried with no opposition recorded during each voice vote. Mayor Shelley Carlson and council members asked no substantive follow-up questions after Hogan’s explanation; Hogan said Moody’s rating conference is scheduled for August 6 and the sale is planned for August 25 with proceeds expected September 18.

Hogan noted that the bonds will be issued under the city’s statutory authorities and in consultation with bond counsel and that the sale will be accompanied by a rating process. He also said market indices have been relatively stable since January and staff will provide an updated market outlook in the days before the sale.

No vote tallies were read into the record; council accepted the resolutions by voice vote and the mayor declared each motion carried.