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Lewisburg council set to consider $1.5 million capital outlay note and reimbursement resolution
Summary
City staff proposed a 2025 capital outlay note and accompanying reimbursement resolution to net roughly $1.5 million for infrastructure projects; consultants estimated a fixed interest rate near 4% and recommended a 12-year amortization with an early-call option to preserve fund balance and avoid tax increases.
Lewisburg City Treasurer Alan Owens and financial consultant John Warner of Cumberland Securities presented a proposed reimbursement resolution tied to a 2025 capital outlay improvement note, recommending a not-to-exceed note that would aim to net about $1,500,000 for a construction fund.
Owens said the reimbursement resolution would allow the city to reimburse the general fund for expenses incurred on ongoing projects before closing on the note. Owens listed potential projects pulled from the adopted 2026 budget: Third Avenue drainage ($485,000), humidification system ($455,000), road resurfacing ($300,000) and taxiway apron rehabilitation ($333,000), a total of $1,574,000. “So that's why the that number says 1,000,550 as the total, not to exceed amount of the note,” Owens said, explaining the financing structure would include issuance costs and a cushion.
John Warner, Cumberland Securities, said the city’s recent fiscal performance supports favorable bids and that consultants are anticipating a fixed interest rate “somewhere around 4%,” adding that true pricing will depend on bids. “We are anticipating…rates could be somewhere around 4% and that would be a fixed rate,” Warner said.
Councilors pressed staff on term length and taxpayer impact. Owens offered a preliminary amortization projection of about $170,000 per year over 12 years, which he estimated would translate to roughly a 4-cent property-tax impact on current valuations. Warner suggested structuring a 12-year amortization with the option to prepay the note without penalty after five years to preserve future flexibility.
Owens and Warner said the city would run an RFP, invite local and regional banks and present bid results and a formal resolution at the council’s September meeting; the proposed award would be contingent on approval by the state comptroller. Owens estimated cost-of-issuance fees between about $17,500 and up to $25,000 to cover bond counsel, consultant fees and potential bank counsel review.
Next steps: staff will present a reimbursement resolution and RFP/bid results to council at the September meeting, after which the comptroller must approve the transaction before any closing.
Ending: The council agreed to move discussion forward to the regular meeting agenda so members could consider the formal reimbursement resolution and the proposed note.
