Council authorizes start of $7.8M promissory note sale for fire station phase; advisors outline terms

The Superior Common Council voted on Oct. 7, 2025, to authorize staff to proceed with a competitive sale of general obligation promissory notes, series 2025C, with a par amount of $7.8 million to fund phase 1 of the city’s fire station construction. Peter Madel, a municipal advisor with Ehlers, reviewed the financing plan and debt‑service implications during the council meeting.

Madel said the plan splits the total fire station financing into two issues to preserve bank‑qualified status for the city: $7.8 million in 2025 (the series 2025C notes) and an additional $2.2 million to be issued in early 2026. “The city can issue up to $10,000,000 in tax‑exempt, bank‑qualified notes in each calendar year,” Madel said; splitting the borrowing keeps each calendar year under that cap, which can lower interest costs because banks purchasing the notes can deduct interest expense.

The municipal advisor described the proposed terms: a 20‑year amortization for the notes, an estimated true interest cost in the mid‑4% range in conservative pricing scenarios and an eight‑year call date (the earliest date the city could refund the issue if rates fall). Madel also showed the city’s available statutory borrowing capacity and said the proposed issue leaves the city well under the Wisconsin statutory limit on general‑obligation debt (5% of equalized value) and under the city’s own self‑imposed 3% policy limit.

Councilors raised questions about debt scheduling and future levy impacts. Councilor Franisi asked how the series’ debt service would appear in the city’s multi‑year projections; finance staff and the mayor said the 2026 and later budgets will show detailed debt schedules and that the fall budget presentation used conservative, aggregate growth projections across departments rather than line‑by‑line debt modeling. Councilor Herrick asked about the city’s 3% internal debt ceiling; finance staff reported an available borrowing capacity consistent with the city policy.

The motion to adopt a resolution authorizing the issuance and sale of the general obligation promissory notes (series 2025C) was made by Councilor Moffatt and seconded by Councilor Elm; the council approved the resolution by voice vote. If the council proceeds according to the schedule presented, the offering document and investor marketing would follow in late October, with a competitive sale planned for Nov. 4 and closing in mid‑November, contingent on market conditions.

Why it matters: Issuing general‑obligation notes increases the city’s debt burden and will raise future debt‑service payments unless offset by other revenues or future policy choices. City staff and advisors described options — including using enterprise revenues for golf course work and staged bonding — to limit levy impact. The council’s vote on Oct. 7 authorizes the financing process but does not represent the final bond sale; the city will return to council with sale results and final authorizing documents.

Ending: Staff and the municipal advisor said they will prepare the offering materials and return to council with sale details; councilors requested additional clarity in future budget materials about how new debt service will appear in multi‑year projections.