Aberdeen council approves ordinance to issue up to $20 million in sales-tax bonds for new public works facility

The City of Aberdeen City Council on April 21 approved Ordinance 25-0405 (first reading) authorizing the issuance of up to $20,000,000 in sales-tax revenue bonds, known as Series 2025A, to fund construction of a new public works facility.

City Finance Director Jordan walked the council through the ordinance, saying the bonds would fund an approximately 86,000-square-foot facility on Industrial Avenue on Aberdeen’s east side to replace a complex of 10 existing structures, the oldest dating to the 1940s. Jordan said the ordinance outlines annual principal payments ranging from about $300,000 to $1.5 million, interest estimated at about 5.75 percent and a final payment due on or before December 2044.

The measure matters because it commits sales-tax-backed debt to a multi-year construction project and raises the city’s debt in the special sales-tax fund from roughly 9 percent to about 31 percent of projected sales-tax revenues; staff noted that remains below an industry benchmark of 50 percent. City Manager Robin Bobzine and outside financial adviser Tom Grama of Colliers were on hand to answer council questions.

Council discussion centered on the size of the issuance, design choices and timing. Jordan and city staff said a $20 million authorization reflects a conservative planning number; earlier budget documents showed a lower placeholder figure at about $18 million but staff recommended the higher amount to avoid underfunding. On design, consultants and staff said the building footprint has been reduced from earlier concepts (which had larger storage areas) to roughly 85,000–87,000 square feet, with plans to store some seasonal equipment off-site to reduce the new building’s size. Staff also said the design moved from precast concrete panels to a steel-frame approach to lower construction costs.

"I would really hate to see this project stall because we didn't plan for quite enough money," City Manager Robin Bobzine said, explaining the rationale for a larger authorization.

Officials said the design phase is nearing completion, the city anticipates setting a bid date in July 2025, and construction is expected to take about two years, with occupancy likely in late summer or fall 2027.

The ordinance passed on a roll-call vote. Following the council vote, staff said the final timing and exact debt service schedule will depend on bid pricing and financing results.

Votes at a glance

- Ordinance 25-0405 (sales-tax revenue bonds, Series 2025A): Approved (motion: Councilmember Ward; second: Councilmember Nordstrom). Authorizes up to $20,000,000; principal payments estimated $300,000–$1,500,000 annually; interest estimated ~5.75%; final payment by Dec. 2044. First reading approved.

- Appointment of Matt Braun, Parks and Recreation and Forestry Director: Approved (motion: Councilmember Johnson; second: Councilmember Ward). Start date April 28; annual salary reported $109,008.28.

- Retail on-sale liquor license for Elevity Entertainment: Approved (motion: Councilmember Liebelt; second: Councilmember Johnson). Councilmember Nordstrom recorded an abstention.

- 2025 budgeted transfers (as provided in 2025 budget ordinance): Approved (roll call). Staff noted transfers were routine and previously budgeted.

- Ordinance supplements and transfers (general supplement, parks/recreation supplement): Approved on first readings (routine budget housekeeping; transfers reflect grants/donations and timing differences).

- Property tax abatement items (county-originated valuation corrections): Approved (roll call).

- Resolution establishing Tax Increment Financing (TIF) District No. 44 for an 11-home affordable housing project: Approved (motion: Councilmember Ward; second: Councilmember Foburg). The district would finance $544,883 in public improvements (plus interest) for roadway and utilities; the developer has agreed to require initial sale prices at or below the South Dakota Housing Development Authority first-time homebuyer limit in effect at sale. One abstention was recorded (Councilmember Ronan/Ronayne listed as abstaining in roll calls).

- Rezoning petitions (multiple properties): First-reading approvals recorded for a rezoning from A-1 to R-2 (medium-density residential) for lots near Baird Park and a rezoning from I-2 to C-2 along Brown County Highway 19 to match adjacent commercial zoning.

- Equipment and construction-related approvals: Approved purchases and payments included a bus wash (~$20,786; grant-funded with a city share reported), a Benco four-post lift (~$27,706), two John Deere mowers via Sourcewell (~$96,495.70) with two older mowers declared surplus, engineer payments to Helms & Associates (multiple invoices totaling several thousand dollars), and final contractor pay request No. 5 to B & B Contracting for $144,608.48 (Klein Street storm sewer project closeout). Staff noted the Klein Street payment mostly resolved a retainage oversight.

- Claims and payroll for the period April 6–19 and the weekly bill list: Approved. Several abstentions were recorded by council members on specific votes.

Speakers and attributions referenced in this report were taken from the meeting record and include the city’s finance staff, city manager and council members; where a speaker’s full title was provided in the record, it is included in attributions above.

Background and next steps

Staff said design work and permitting remain, with the bid date anticipated in July 2025 and a roughly two-year construction window thereafter. The final debt service schedule, interest rate and principal amounts will be set when the city issues the bonds and receives bids. The council’s action authorizes staff to proceed with financing consistent with the ordinance, subject to final bid/financing results.

Ending

Council members expressed general support for the public works consolidation and noted benefits from grouping divisions in one facility. The council moved on to other agenda items after the bond ordinance vote, including the appointment of a parks director and multiple budget and procurement matters.