Council tables bond measure for sewer camera after questions on process, bond counsel

A proposal to authorize issuance of up to $370,000 in general-obligation sewer revenue bonds to finance a sewer-inspection camera generated extended discussion Oct. 28 and was tabled for further review.

Pam, the city administrator, explained staff had originally proposed leasing the equipment, but underwriters raised concerns tied to the city audit and unassigned negative balance; Huntington (the financing firm) did not approve the lease after review. Staff presented an alternative: a general-obligation revenue note structured so payments come from the sewer enterprise fund rather than the general levy.

Councilor Paulson and others pressed staff and finance for details about whether a general-obligation bonded note would affect the city’s bond rating and asked why the council had not been informed earlier that the lease option was declined. Megan, the finance director, said the sewer fund has about $2 million (unaudited) in reserves but that the city preferred not to deplete the fund and thus sought financing. Several councilors said they were uncomfortable approving the bond without bond counsel and underwriter presence and asked for Freiburger Buchanan (bond counsel) or underwriter explanation.

Councilor Johnson moved to table the bond resolution and send it to the committee of the whole for additional information; the motion was seconded and carried. Staff said Huntington had provided preliminary amortization information and that the camera had already been delivered and a $75,000 down payment had been made from the sewer fund.