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Allegan council approves notice of intent to issue revenue bonds for water, sewer and street improvements
Summary
The council adopted a notice of intent to issue revenue bonds for water and sewer system improvements, including work in Rossman Park and a wastewater sludge‑thickener project; bond counsel and the city’s financial adviser outlined a multi‑stage sale, a roughly 20‑year structure and an estimated blended yield near 4%.
The Allegan City Council on Oct. 13 adopted a notice of intent to issue revenue bonds to finance water, sewer and related street improvements.
Bond counsel Roger Swatz of Dickinson Wright told the council the notice of intent starts the public process, sets not‑to‑exceed amounts and begins a 45‑day public notice window during which residents could petition for an election. Swatz said the bonds would be revenue bonds paid only from the systems’ revenues and would not encumber the city’s general fund or count against its general debt limits.
Financial adviser Steven Burke of MFCI told the council that, on a 20‑year final maturity, the blended yield on the proposed offering would likely be around 4% if sold under current market conditions. Burke and bond counsel explained that the sale would be split across maturities, that bids would be taken by public sale, and that the council would later approve a bond resolution and award construction contracts once bids are in hand.
Staff described projects to be financed, including street work in Rossman Park, Grand Street, downtown improvements, lead‑service replacements, and upgrades at the water resource recovery facility — notably a sludge thickener. Staff said audited FY25 hauling costs for biosolids were $535,898.24 and estimated post‑installation hauling costs would be about $334,857, producing approximate annual savings of $200,000 once the thickener is installed.
During the presentation counsel read the draft 'not to exceed' amounts aloud (the meeting audio recorded the water amount as read aloud '7.02 70' and the sewer amount as '10,040,000'); council later adopted the notice of intent resolution by voice vote. Staff and bond counsel emphasized this step does not obligate the city to borrow the full not‑to‑exceed amounts; final sizing depends on contractor bids and later council approvals.
Council also discussed the financing term and said staff had run analyses that supported a 20‑year structure based on the city’s rate program and current projections. No petition or public objections were filed during the meeting; after the 45‑day publication period the council would proceed if no sufficient petition for an election is submitted.
The notice starts the formal process; a bond sale was projected (per the packet) to go to market in early February with a closing in March, subject to change based on bids and market conditions.
