Committee approves three bond refundings, forwards 2026 budget to council without recommendation

The Monona committee on Nov. 17 approved three separate bond refunding measures intended to lower borrowing costs and smooth future payments, and forwarded the proposed 2026 operating budget and tax levy to the full City Council without a committee recommendation.

The committee approved Resolution 25-112846 to issue general obligation refunding bonds (series 2025B). City financial advisers said the par amount was reduced from the $3.9 million shown in preliminary materials to about $3,640,000 after market pricing; a net premium of $236,475 at delivery will offset costs, and the advisers reported a true interest cost of 4.125% for the 18‑year issue. The committee discussed the bonds’ call provisions; staff clarified the maturity language and confirmed the issue has a redemption subject-to-date in 2034, with earlier references to 2031 corrected in the meeting record.

"We have at the day of closing, what we call a true interest cost of 4.125% for that 18 year issue," said Jeff Balaji of Hutchison, the city's financial adviser, describing the market pricing and premium that reduced the par amount.

The committee next approved Resolution 25-112847, a $1,550,000 taxable general obligation refunding (series 2025C) tied to tax incremental districts (TIDs). Staff described a donor/recipient TID strategy that shifts the timing of TID revenues to increase near-term cash flow for debt service; advisers explained these taxable bonds pay coupons (roughly in the 4.05%–4.45% range depending on maturity) that track Treasury yields. Committee members and advisors noted several of the TID-related issues are callable and that early-year TID increments can appear low under the donor/recipient arrangement before rising in later years.

The third action, Resolution 205-112848, authorized a $4.6 million water and sewer system revenue bond (series 2025D) to replace two short-term utility notes and to include additional project funding as available. Advisers said the city’s revenue bonds carry strong coverage (over 2x), allowing a longer-term issue structured to avoid sharp rate increases for utility customers. The presentation emphasized that bond anticipation notes do not count against certain debt calculations and that premiums, if any, could be used for project costs or to reduce future debt service.

A committee member moved that the proposed 2026 operating budget and tax levy be forwarded to the City Council "without the recommendation." The motion carried on voice vote; the transcript does not record a full roll‑call tally for the budget motion. In their committee discussion, members reviewed capital priorities including library HVAC, Nichols Road work, the Public Works garage punch list, the Lakeridge Bank credit-card system, festival/special-events allocations in the recreation budget, and several TIF-related development agreements.

Votes at a glance - Resolution 25-112846 (GO refunding bonds, series 2025B): Approved; transcript records affirmative votes including Alder Wood and a member listed as "Alder Diplua" in the meeting record. Full roll-call not fully recorded in the transcript. - Resolution 25-112847 (taxable GO refunding/TID, series 2025C): Approved; transcript records affirmative votes including Alder Tupelo and Alder Wood. - Resolution 205-112848 (water/sewer revenue bonds, series 2025D): Approved; transcript records affirmative votes including Alder Wood and Alderman Chapuk. - Advisory 25-28-H4 (2026 operating budget and tax levy): Forwarded to City Council without recommendation (voice vote); full roll-call not recorded in the transcript.

Why it matters The approved refundings are structured to take advantage of current market rates and premiums to reduce the par amount and overall borrowing cost, which affects the city’s debt service levy and the timing of payments. The TID-related taxable refunding uses donor/recipient mechanics to re-time incremental revenues, which can affect when TID revenues are available to pay debt. The water and sewer revenue bonds refinance short-term notes into a longer-term structure intended to smooth utility rates for customers.

What’s next Staff will finalize the bond documents and close the financings; the 2026 operating budget and levy will be considered at an upcoming City Council meeting. Committee members said they intend to proceed with bidding and project timing for library HVAC and road projects ahead of next year's borrowing.

Sources: Committee meeting transcript, Nov. 17, 2025; presentation remarks by the city's financial adviser, Jeff Balaji of Hutchison.