Sumner City issues $26.6 million water‑sewer revenue bonds under February delegation

Chief Financial Officer Cassandra Raymond said Sumner City closed a long‑term water‑sewer revenue bond sale in late April under authority delegated by Ordinance 2918, issuing $26,595,000 of revenue bonds for the utility portion of the Public Works Operations Facility.

Raymond said the bonds received an AA rating from Standard & Poor's and carried a stated interest rate of 5% (with a 6% ceiling), producing a true interest cost of 4.52%. "We ended up going into the market on Thursday morning. We were able to watch it in real time. I think we had over $80,000,000 of orders for $26,000,000 of issue," she said, describing strong investor demand that allowed staff to reduce all‑in cost by several basis points.

The bond sale funded about 51% of the utilities portion of Phase 3 construction for the Public Works Operations Facility; the governmental portion is being paid from proceeds of the Sumner Meadows golf course sale, Raymond said. She explained the city used a multipronged financing strategy that has included bond anticipation notes, a Public Works Trust Fund loan and utility financing to acquire the site.

Raymond described the rating process as intensive. She said S&P looked at management and fiscal policies, infrastructure maintenance plans and utility rate practices. "Some of the strengths that S&P noted ... include affordable service rates, robust debt service coverage and healthy cash reserves," she said.

City staff named the mayor, the city administrator and the deputy city administrator as authorized signatories under Ordinance 2918, and expanded the ratings team to include Public Works Director Michael Cosa and City Attorney Andrew Marquez for the bond issuance work. DA Davidson served as underwriter and K&L Gates served as bond counsel.

Raymond said the ordinance authorized a maximum par amount of $29,000,000 and a final maturity not to exceed 30 years; the issue closed under the delegated parameters in late April. She said finance staff will now file regular reports with the Municipal Securities Rulemaking Board and will incorporate the new debt service schedules in the next utility rate study.

Councilmembers praised staff for the work required to prepare the rating and for the market result. Raymond credited internal staff — including Mr. Khosla for technical utility work — and outside advisors for pulling the materials together on a tight timeline.

Details recorded from the meeting: the bond par issued was $26,595,000; stated coupon 5% (ceiling 6%); true interest cost 4.52%; S&P rating for the 2025 series: AA; maximum par authorized by the ordinance: $29,000,000; delegation provision set to expire in February 2026. The sale closed in late April under staff delegation; there was no council vote reported at this study session.