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City approves up to $1 million interfund loan to support Traverse City Light & Power smart-grid project
Summary
The commission authorized a contingency interfund loan of up to $1 million to support the TCLP smart-grid and fiber project; staff said procurement savings and a general-obligation bond will cover most costs, and the city loan will act as a local, flexible contingency.
The Traverse City Commission authorized an interfund loan of up to $1 million on Oct. 20 to support the current smart-grid and municipal fiber expansion being built by Traverse City Light & Power (TCLP).
City and TCLP staff briefed the commission: the build will enable fiber connectivity to roughly 73% of the utility’s customer base, the project remains on schedule (projected completion June 30, 2026 with a stretch goal of fall 2025), and recent procurement savings mean a general-obligation bond will now cover most project costs. The requested interfund loan is a contingency mechanism to cover the project’s 10% contingency and a 25% take-rate sensitivity; it would be a 10-year loan indexed to the 10-year Treasury rate and bears no prepayment penalty.
Carla, presenting for city/TCLP finance, noted that using local funds provides implementation flexibility and retains interest earnings in the community rather than routing all financing through federal programs with heavier compliance burdens.
The commission authorized the mayor and interim clerk to execute the agreement, and the motion passed on a voice vote.
TCLP leaders said the loan preserves local flexibility while the primary financing moves forward by bond; city and utility staff will continue coordination on schedule, take-rate monitoring and reporting.
