Council directs publication of notice to issue up to $15.7 million in certificates of obligation; one councilmember objects

The Josephine City Council on July 14 directed staff to publish formal notice that the city intends to issue up to $15.7 million in combination tax and revenue certificates of obligation to fund utility system and drainage improvements.

Hilltop Securities, the city's financial adviser, presented a financing plan that splits the proposed program into a debt service portion backed by property tax (for drainage) and a utility‑fund portion (for water/wastewater projects). Hilltop modeled a par amount near $15.485 million structured as a 25‑year fixed‑rate obligation and used a conservative assumed interest rate of about 5.14% for planning. The adviser noted the city’s Standard & Poor’s investment‑grade double A‑minus rating and outlined a timeline: publish notice, market the offering in early September and close in late September if council proceeds.

Why it matters: The plan would provide funds for drainage projects and wastewater/water system capacity and is timed so proceeds would arrive before the fiscal year-end audit. Hilltop said the structure is not expected to change the city’s credit rating. The model projected total principal and interest of about $27.1 million over 25 years under the conservative assumptions in the presentation.

Council debate and dissent: Council discussed whether the debt should be placed before voters in a bond election. One councilmember moved to require a November bond election; that motion did not receive a second. Another councilmember asked for the citizens to decide and raised concerns about a single project — the Milton sewer — which had increased that evening. Several council members argued that delaying to a ballot could increase costs and jeopardize projects. Ultimately council voted to adopt a resolution directing publication of the notice of intent; the clerk recorded the resolution as carried with four votes for and one against.

What happens next: Publication of the notice starts a statutorily required public period (notice publication and waiting period) before the city may proceed with an ordinance to issue certificates. If the council proceeds, staff and Hilltop expect to return in September with bond documents and final bid results for council approval.