Monona council authorizes $3.3 million general-obligation note to fund capital projects

The Monona City Council voted to approve a resolution authorizing the sale of a $3,300,000 general-obligation promissory note, Series 2025A, to fund capital projects after hearing results from the municipal market.

Financial advisor Jeff Balange of Huttgen & Shockey told the council the note produced a true interest cost of 4.33% at closing and a market “net premium of $7,147” that must be applied to the city’s debt-service fund. Balange said the city also should expect some interest income on the proceeds while funds await use and estimated at least $66,000 of interest income conservatively.

The council discussed how portions of the borrowing will be paid from stormwater and water revenues so the full amount will not fall to the tax levy. City staff and the borrower adjusted the borrowing size after recent construction bids arrived; the amount taken to market was $3.3 million, down from an earlier estimate.

The motion to approve the resolution (listed in the meeting packet as Resolution 25-4-2804) passed on the council’s vote.

Why it matters: the borrowing supplies cash for capital work already on the council’s list while preserving the city’s AA+ rating, which participants said supported market demand for the issue. The council’s approval lets staff proceed to closing and apply premium and interest income to the debt-service budget.

Council members asked for basics of how the borrowing’s structure affects future budgets and were told the premium is applied to the debt service fund and that stormwater and water revenues will offset part of the levy impact.

The council concluded the item after a roll call vote approving the resolution.