Monona approves roughly $3.3 million general obligation promissory note for 2025 capital borrowing

The City of Monona Common Council voted to approve a resolution authorizing the issuance and sale of approximately $3.3 million in general obligation promissory notes as part of the citys 2025 capital borrowing.

Council members heard a presentation from Jeff (a Hudson representative) summarizing the bond sale results. Jeff said the citys AA+ rating helped the issue perform well in a choppy market and that the sale produced a net premium of $107,147, which he said would be deposited into the citys debt service fund to offset the first payment next year. "We have basically a true interest cost," Jeff said. "We'll show you a TIC at the time of closing of a $4.33." He characterized yields across maturities as roughly 3.26 percent at the near end to about 3.78 percent at the long end, a spread of about 41 basis points between 2026 and 2034.

Jeff told the council the municipal market had digested a large supply of issues in recent weeks but remained liquid. He also noted the council had originally anticipated an issue size closer to $4.3 million but that the transaction pricing and structure produced the roughly $3.3 million issuance now before the council. He said the premium plus a few months of investment earnings should produce modest additional funds for debt service, noting an expectation of at least about $6,066 in investment earnings during the short holding period before funds are spent toward projects.

Alderman Doug asked whether the municipal market was less volatile than the Treasury market. Jeff replied that municipal pricing is anchored to Treasuries but behaves differently because munis are tax-exempt and trade relative to credit; he said munis were "being very well received" and showed somewhat more stability than other markets in recent weeks.

After the presentation and questions, a council member moved to approve the resolution and a second was recorded. The council conducted a roll-call vote; the chair announced the issuance was approved. The council then moved to go into closed session under section 19.85(1)(e) to deliberate or negotiate the purchase of public property and for bargaining reasons, including discussion of a contract with Accurate Appraisal LLC.

No dissent or alternative motions were recorded during the public presentation or the vote. The council did not discuss use of the borrowed funds in detail at the time of the vote beyond the general statement that proceeds and the premium would support the citys 2025 capital borrowing and debt service obligations.