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Medina council approves bond anticipation notes to preserve borrowing option for courthouse project
Summary
The Medina City Council adopted two ordinances to issue bond anticipation notes totaling up to $8 million in not-to-exceed authorizations, added an emergency clause, and amended interest payment timing from semiannually to annually; council members and finance staff said the city will not actually borrow now but is preserving the option to do so.
Medina City Council on Tuesday approved two ordinances authorizing the issuance of bond anticipation notes related to the city’s courthouse project and adopted an amendment to make interest payments annually rather than semiannually.
City Finance Director Durham told council the moves preserve the city’s ability to borrow later while the city currently has cash to proceed. “We are not borrowing money to do anything with the courthouse at this time,” Durham said, explaining the bond anticipation notes are a procedural step to preserve future borrowing capacity.
The notes are set up in two ordinances: Ordinance 104-25 (not to exceed $3,000,000) and Ordinance 105-25 (not to exceed $5,000,000). Council adopted emergency clauses for both ordinances and approved a council amendment to change the ordinances’ interest-payment frequency from semiannually to annually. Both ordinances passed on roll calls recorded 7-0.
Why it matters: Durham said the city used cash to pay for the courthouse work but wants the legal ability to borrow later if economic conditions or interest rates make borrowing advantageous. Durham described bond anticipation notes as preserving the option to convert cash expenditures into financed debt later, if desired.
Key details: Durham said the overall courthouse project cost about $11,450,000. Of that, he said the city is fronting about $3,450,000 and a “special courthouse project fund” will provide about $8,000,000; that fund collects fees and contributions from users and jurisdictions that benefit from the courthouse. Durham told council the special fund will reimburse the city for the portions it fronted. Council amended the draft language so interest on the notes will be paid annually, and approved emergency clauses because funds were already being expended against the project.
Council action and votes: Council adopted Ordinance 104-25 (as amended) and Ordinance 105-25 (as amended) with emergency clauses; both measures passed 7-0 on recorded roll calls. Council discussion included the mechanics of preserving borrowing capacity and an administrative clarification to change the interest-payment schedule to annually.
Background and next steps: Durham said the change will not necessarily cause an immediate borrowing event; it keeps options open should the city later decide to place long-term debt. The city will proceed with current payments and accounting steps; if borrowing becomes desirable, staff would return with details. The ordinances as adopted authorize the mayor to complete the note issuances and related administrative steps.
Ending: Council did not debate alternatives to the financing approach at length; finance staff characterized the action as a prudent administrative step to preserve future flexibility while using available cash to complete courthouse construction.
