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Montgomery approves $7.25M in TIF-backed bonds and refunds older water-backed debt, citing modest savings
Summary
Trustees approved issuance of the Series 2024A bonds to fund Orchard Road TIF projects and the Series 2024B refunding to move 2013 water-pledged debt to a sales/utility-tax pledge; the refunding produces roughly $66,590 in nominal savings (present value ~$63,956) while freeing water revenues for future borrowing.
The Village of Montgomery Board of Trustees approved bond actions tied to the Orchard Road TIF and a refunding of older water-backed debt during its Sept. meeting.
Director Malewski told trustees the competitive sale produced favorable results for the Series 2024A bonds, which finance capital improvements in the Orchard Road TIF district. The issuance was resized to generate $7,250,000 in net proceeds (par revised to $6,935,000). The winning underwriter for the 2024A issue was Robert W. Baird with a bid that priced at roughly 3.17 percent after resizing.
The board also approved the competitive sale of Series 2024B, a refunding issue that withdrew a pledge of water revenues on 2013 bonds and replaced it with a pledge of sales and utility tax revenues. Director Malewski said the low bid for 2024B was about 3.5857 percent; the refunding will free water-pledge capacity and yield debt-service savings the staff calculated at $66,590 in total debt service and about $63,956 on a present-value basis (roughly 2.9 percent present-value savings).
Malewski emphasized that the principal policy goal was to remove the debt from the water-pledge to preserve water revenues for future borrowings. "This was the main focus," Malewski said. He also noted that S&P affirmed the village’s AA rating with a stable outlook, which supported the competitive results.
Trustees asked standard procedural questions about bid mechanics and the reuse of any excess TIF proceeds. Legal and finance staff explained that bond proceeds must fund TIF-eligible capital projects and that any unspent proceeds may be reallocated within the TIF but cannot be used outside the district without further approvals.
The board approved the related motions by roll call (votes recorded as carrying 6-0). The ordinance for a separate water-related refunding (first reading) was presented for an additional item and scheduled for a subsequent reading.
