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Fort Atkinson council approves parameters to issue up to $7 million in general obligation notes
Summary
The Fort Atkinson City Council authorized sale parameters for up to $7 million in general obligation promissory notes to refinance short-term TID #9 construction notes (about $3.51M) and to fund roughly $3.405M in capital projects, with staff estimating a planning interest rate of about 4.5% and closing in February 2026.
The Fort Atkinson City Council on Dec. 2 approved a parameters resolution authorizing the issuance and sale of general obligation promissory notes not to exceed $7,000,000 to refinance short-term debt tied to Tax Increment District (TID) #9 and to fund capital improvement projects.
City manager Hausman introduced the item and financial adviser Justin Fisher of Baird gave the presentation. Fisher said roughly $3.51 million of the proposed financing would retire short‑term construction notes issued in 2024 for TID #9 and about $3.405 million would fund capital projects, including an estimated $500,000 in water‑supported work. He described the proposed notes as maturing in February 2046 with the first interest payment in 2027, and callable beginning Feb. 1, 2034. Fisher said staff is planning conservatively for about a 4.5% interest rate for modeling, with a parameters cap that would allow issuing within council limits if market conditions shift.
"The purpose of this is to refinance those '24 notes . . . for the amount of about 3,510,000," Fisher said, adding that combining refinancing with new money can create economies of scale.
Fisher reviewed a TID pro forma that projects annual revenues through 2044 and showed the plan targeting positive annual cash flow and a cumulative TID balance that could approach $2 million by the district's end if projections hold. He also presented a long‑term capital improvement plan that models roughly $3 million in city‑supported financing every other year to support equipment and road projects while managing overall levy‑supported debt service.
Fisher noted the city currently holds an AA‑ bond rating and said he did not anticipate that this financing would materially change that rating. He outlined the anticipated timeline: potential market access the week of Jan. 21, 2026, and a possible closing on Feb. 23, 2026, if parameters are met.
Council members asked about the city's policy capping borrowing at 60% of the state statutory limit and how that compares with state practice. Fisher said the city policy is more conservative than the state's 5% statutory limit and is within norms for Wisconsin communities. He explained the distinction between short‑term anticipation notes used for construction and the longer‑term promissory notes the council approved for authorization.
Staff recommended adoption of the parameters resolution; an unnamed council member moved the measure, it was seconded, and the council approved it by voice vote. The motion carried.
The resolution delegates authority for final sale sign‑off to city staff within the approved parameters; no final sale or pricing was completed at the meeting. The council will consider market conditions and final documents before any sale is executed.
