Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Council authorizes up to $42 million in bonds to accelerate voter-approved Pathways to Play and preservation projects
Summary
Sterling Heights approved a resolution authorizing the issuance of limited-tax general obligation bonds not to exceed $42 million to fast-track Pathways to Play & Preservation projects (pickleball complex, Rotary Park redesign, sidewalk gap program, Red Run trail and a land bank). Council debate focused on interest costs and timing; the resolution passed 5–2.
The Sterling Heights City Council voted to authorize the issuance of up to $42 million in limited-tax general obligation capital improvement bonds to accelerate projects approved under the Pathways to Play & Preservation millage.
Finance staff presented a project list and financing plan. Assistant Finance Director Jennifer Varney and bond counsel Pat McGow explained that bonds will finance major elements of the millage program so projects can be completed in a three-year timeframe rather than being built piecemeal over many years. Varney said the city collects about $5.6 million annually from the millage and that the plan assumes bond yields under 4% based on current market conditions; the resolution sets an upper interest-rate parameter (up to 5.25% per the paperwork) to allow for market fluctuation during the sale process. Pat McGow explained that a higher stated maximum provides bidding flexibility and that the city is required to accept the lowest net interest cost when bids are opened.
Council discussion included resident questions about cumulative interest and whether the city should pay-as-you-go rather than borrow. One resident who spoke during public comment noted that issuing the bonds would create interest costs (she estimated $3.6 million) that would not occur under a pay-as-you-go approach. Supporters of the bond said borrowing allows the city to complete all voter-approved projects sooner, capture construction cost savings and deliver benefits to residents sooner.
After debate, the council adopted the resolution authorizing issuance of not-to-exceed $42,000,000 in limited-tax general obligation capital improvement bonds, with the council recording a roll-call vote that passed 5–2. (The transcript recorded the roll-call tallies; names associated with each yes/no vote were not consistently recorded in a single, unambiguous list in the transcript.)
What happens next: the resolution allows staff to proceed with the formal bond-sale process. Staff said they will attempt to obtain the lowest net interest rate in the market when the bonds are sold and will return with the final sale results and repayment schedule.
