Monona authorizes bond refundings: $3.9M GO, $1.55M taxable GO for TIF strategy, and $2.95M water/sewer revenue bonds

The Monona City Council on Oct. 20 authorized staff to proceed to market for three separate bond refundings to refinance existing debt and to pursue a strategic reallocation of increment to a donor TIF.

First, the council authorized the sale of $3.9 million in general obligation refunding bonds (Series 2025B) to refinance a short-term 2021 note used to acquire the Sam Damiano property. Staff said the city has been making principal and interest payments of about $324,000 and that refinancing is necessary because the note is due in 2026; Dane County previously contributed $2 million toward this debt. Staff said the refinancing is expected to keep the property-tax levy impact at about the current level and includes a call provision to allow re-refinancing should rates fall.

Second, the council authorized a $1.55 million taxable general obligation refunding (Series 2025C). Staff described this as a strategic move to donate more increment to Tax Increment Financing district 9 (TIF 9) from an older donor district (TIF 8). Staff said that if the city does not refinance, it would donate roughly $215,000 to TIF 9 over the next four years; the proposed refinancing would shift approximately $1.5 million into TIF 9 to help cover large upcoming principal and interest payments. Staff said TIF 8 could still be paid off under this structure and that keeping TIF 8 open through 2039 could leave about $3.7 million in total increment for other projects.

Third, the council authorized proceeding with sale of $2.95 million in water- and sewer-system revenue refunding bonds (Series 2025D) to refinance bonds that mature in early 2026 (water remaining balance $1,385,000; sewer $1,415,000). Staff noted that revenue bonds may achieve better interest rates if sold in larger aggregate amounts and that, depending on approval of the capital budget, the water portion could be included in a larger offering, which would increase the authorization amount when formally returned to the council.

All three authorizations were approved by the council. Staff was directed to work with the city’s financial advisor and rating agency to take the bonds to market.