Allegan council authorizes sanitary and water revenue bonds to fund infrastructure projects
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Summary
The City of Allegan on Jan. 26 authorized issuance of up to $10,040,000 in sanitary-sewer first-lien revenue bonds and up to $7,270,000 in water-supply first-lien revenue bonds, both with 20-year terms and interest not to exceed 7%; staff cited a $2.5 million MEDC grant for water improvements and next steps including a credit rating and bid process.
City of Allegan leaders on Jan. 26 voted to authorize the issuance of first-lien revenue bonds to fund major sanitary-sewer and water system projects.
Council adopted Resolution 26.02, authorizing sanitary-sewer bonds not to exceed $10,040,000 with an interest rate not to exceed 7% and a 20-year repayment schedule. Later the council approved Resolution 26.03, authorizing water-supply bonds not to exceed $7,270,000 under the same maximum interest and term. Both resolutions passed by voice vote after staff presentation and brief council discussion.
City staff told the council the October notice and petition period required for bond issuance produced no petition to halt the process, enabling the city to proceed. “There are a handful of steps in this process,” staff said, noting next steps include obtaining a credit rating from Standards & Poor’s and conducting a competitive bid process for financing. Staff emphasized the resolutions set “not to exceed” amounts; the city does not expect to reach those maxima when final numbers are set.
The city also reported a $2,500,000 grant from the Michigan Economic Development Corporation toward water improvements, which staff said made the water projects financially feasible and helped them scale back certain neighborhood amenities to reduce costs. Staff said the choice of a 20‑year repayment plan was intended to reduce long-term interest costs compared with a 25‑year schedule.
Council did not record individual roll-call tallies in the transcript; each motion was adopted by voice vote with a majority answering “Aye.”
What’s next: staff will pursue a credit rating, issue a request for proposals from underwriters and lenders, and return with financing details and schedules when bids are received.
