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Council approves proceedings to issue up to $24.25 million in general obligation bonds for capital projects
Summary
The council voted 7-0 to take the prescribed steps to issue up to $24.25 million in general obligation bonds; proceeds will fund a list of municipal capital projects and will be repaid from specified local revenue sources.
The Dubuque City Council on Monday approved proceedings to issue not to exceed $24,250,000 in general obligation bonds, clearing the next procedural step toward a scheduled March bond sale.
Chief Financial Officer Jennifer Larson outlined that approximately $23.64 million of the proposed issuance is intended to fund projects already approved in the city budget, including fire truck and ambulance replacements, fire equipment and station improvements, solid waste collection vehicles, airport taxiway improvements, parking ramp maintenance, federal building renovations, the Iowa Amphitheater project on Schmidt Island, ice-arena dehumidification and other capital repairs and upgrades. The remaining $610,000 is budgeted for bond issuance costs and a contingency to cover potential interest-rate fluctuations and other transaction costs.
Larson said the issuance will be marketed after Moody's Investor Service provides a credit rating; the city expects a Moody’s rating release on Jan. 23 and plans an electronic bid sale on March 3 with closing the same day. She told the council bond bids received on March 3 will determine final interest rates and that the results would be returned to the council that evening.
Although the bonds are general obligation in form, Larson said repayment sources for the issues will include local option sales tax, the refuse collection fund, the Dubuque Racing Association and the greater downtown tax increment financing district, depending on the portion of proceeds used.
Council members asked whether the issuance would change the city's bond rating. Larson reported a preliminary Moody’s review indicated the city’s financial ratios and debt load are favorable, and staff expected affirmation of the current double-A2 rating. City Manager Van Milligen and council members asked staff to include summary materials about the city's longstanding debt-reduction policy when the official statement is brought forward.
The council approved the proceedings on a 7-0 roll call. Staff will return with the official statement for approval in late January or early February and proceed to sale in March if timelines hold.
