Bloomington council approves $33 million water bond plan; officials say it is unrelated to dredging

The Bloomington City Council approved borrowing to fund a multi‑year water infrastructure program, authorizing bond proceeds designed to fund water main replacement, lead service‑line replacement and plant upgrades while city officials emphasized the borrowing is unrelated to dredging.

City Manager Jeff Jurgens introduced the item, noting the city’s 10‑year water plan includes projects required by state and federal standards. "Some of these are federal or state mandates that we have to do," he said. Water Director Ed Andrews presented the scope: "Hundred and 25 mil for water main replacement," he said, plus "a hundred million in lead service replacement" and about "$50,000,000 on upgrades" to the treatment plant as components of a broader long‑term plan.

Finance Director Scott Rathbun described the near‑term borrowing plan. The council approved seeking approximately $33 million in bond proceeds and authorized issuance up to $36 million to allow flexibility for market pricing and closing costs. Rathbun said the two fiscal‑year borrowings were combined for efficiency; fiscal year 2025 had $15 million originally planned and fiscal year 2026 about $18 million, with combined proceeds used to reimburse interim financing and fund projects.

Rathbun and Andrews said the borrowing is supported by a multi‑year rate structure already adopted by the council. The rate increases were designed to raise revenue for capital and to create capacity for future annual debt service; Rathbun presented projections showing metered service revenues rising from about $15.2 million in FY24 toward roughly $30.9 million in later years under the adopted rate plan. "This funding really covers the needs for those 2 years," Rathbun said.

Multiple council members asked whether the bond had any connection to proposed dredging projects; both staff and the city manager answered directly. "This actually has nothing to do with dredging. There's nothing in this plan relating to dredging," Jurgens said, and Andrews reiterated the planned work relates to mains, towers and plant improvements.

The council moved and seconded approval of the ordinance authorizing general obligation water bonds; the competitive sale was recommended by the city’s financial adviser. Rathbun said the city had briefed Moody’s and expects continued strong credit ratings to support attractive borrowing rates. The ordinance authorized issuance "not to exceed $36,000,000" to account for possible market discounts or premiums, with the city’s plan to realize roughly $33,000,000 in proceeds.

City staff said projects expected under the borrowing include replacement of aging transmission mains (including mains from the 1920s), decommissioning and replacement of elevated storage tanks, distribution‑system upgrades in targeted neighborhoods and plant electrical and treatment improvements. Several projects are already underway: Prairie Vista water tower work was nearing completion and Meadowbrook water‑main work has produced data on service‑line materials.

Rathbun recommended approving the ordinance and the council voted to proceed with the planned bond issuance. No dredging funds or dredging projects were authorized by this vote; staff said dredging was not part of the water program now before council.