Two Rivers approves up to $3.355 million general obligation note to fund 2025 capital projects

Two Rivers City Council on Feb. 17 approved a parameters resolution authorizing the issuance of up to $3,355,000 in general obligation promissory notes to finance 2025 capital projects and to possibly refinance existing debt.

The resolution gives staff and the city’s financial adviser authority to sell the notes within set parameters; officials said they expect to seek bids in early March and close the financing in April if market conditions are favorable.

City Manager Greg (City Manager) introduced the item and said the borrowing plan would fund levy-supported capital projects as well as wastewater-supported borrowing and a $450,000 portion tied to Sandy Bay development revenues. Greg said the city’s outstanding GO debt is “about less than 40% of our statutory limit,” leaving substantial capacity under both state limits and the city’s policy. Justin Fisher, a municipal finance representative from Robert W. Baird, reviewed interest-rate conditions and the financing timetable and said, “we’re potentially gonna be jumping into the market here in early March.”

Fisher and his team presented a pro forma that assumed an estimated interest rate around 4.25% and a maximum parameter of 4.75%; they told council that historically actual sale rates have often come in below the parameters. Staff said the proposed borrowing would be structured as 10-year notes, callable beginning April 1, 2032, and that a modest levy increase is possible: officials estimated roughly a $65,000 lift in levy-supported debt service next year, or about a 1% lift in the city levy, depending on final rates and choices about refinancing existing state trust fund loans.

Council discussion included concern about any tax lift. Council member Adam Maheski asked for more forward-looking information during budget season and ultimately voted against the resolution, while the measure received ayes from the other members present. The motion to waive reading and adopt the parameters resolution was moved by Bonnie Schimelounis and seconded by Tim Petrie; the measure passed by roll call vote, 8–1 (eight ayes, one no). Dustin (staff member) said staff would notify council the day the issue is placed and would report back by email and at the next meeting.

What happens next: if parameters are met, staff expects to go to market in early March and will return with final sale details to council. If interest rates exceed the parameters, staff said they would update council before placing the issue.