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Allegan council approves bond pivot and multiple Milbacher contracts for downtown and neighborhood infrastructure
Summary
After staff reported lower‑than‑expected S&P ratings, the council approved switching to a negotiated bond sale and adopted amended resolution language. Council awarded downtown and Rossman/Rosslyn infrastructure contracts to Millbacher & Sons and approved related purchase orders and contingencies, including a $6.34M ceiling for the Rosslyn contract with the required 10% contingency.
City staff told the council updated Standard & Poor's ratings prompted a change in strategy for upcoming borrowing. "We came back with a triple‑B for our water system and a triple‑B plus for our sewer system," staff said, and recommended moving from a competitive to a negotiated bond sale to improve pricing and allow more discussion with potential purchasers about the city's rate plans and the concentration risk from a large customer (Perrigo).
Council considered Resolution 26.09 (sanitary sewer first‑lien revenue bonds) and Resolution 26.1 (water supply first‑lien revenue bonds). Members asked clarifying questions about par amounts, face value and combined totals; council amended the sanitary bond resolution to correct a not‑to‑exceed figure and then adopted the amended resolution followed by adoption of the water resolution.
On construction contracts, the council awarded the downtown utility and roadway reconstruction project to Millbacher & Sons (the single bidder on that contract) and approved PO 260848 in the amount reported in the packet ($2,705,711.14). The council also approved notice of award and PO actions for the Rossman Park neighborhood project (Millbacher bid $1.2M below estimate) and for the Rosslyn Park project. For the Rosslyn Park PO (bid $5,767,132.15) staff added the MEDC‑required 10% contingency and the council approved an amended ceiling of $6,343,845.37.
Councilors asked about increases in engineering/construction estimates between earlier (30%, 60%, 90%) phases and the as‑bidded results; project consultants said estimate changes reflect evolving design, public input and updated assumptions. Staff said projects will proceed outset of construction season and the city will return with any follow‑up contract or funding details required by grant conditions.
