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Council authorizes up to $14.5 million in bonds for police headquarters and 911 center
Summary
The council adopted Ordinance 5742 to issue municipal improvement bonds (not to exceed $14.5M) to fund police headquarters and a Fremont-Dodge County 911 call center; staff and Piper Sandler said market conditions point to an issue closer to $13.66M with an estimated interest cost near 3.94% and annual debt service around $1M.
Fremont City Council voted unanimously on June 9 to authorize municipal improvement bonds to complete construction of a new police headquarters and a combined Fremont–Dodge County 911 dispatch center.
City Administrator Jodie Sanders explained the bonds would be repaid primarily with portions of already-imposed local sales tax revenues earmarked for public safety. "We are pledging the use of already imposed sales tax dollars that were set aside for public safety purposes," Sanders said, noting the measure is not a voter referendum and that the city expects to apply dedicated sales-tax receipts to debt service.
Scott Keane of Piper Sandler walked the council through financial covenants in the ordinance: a principal cap of $14.5 million, a true-interest-cost (TIC) cap of 5 percent and a final maturity no longer than 25 years. Keane said current market conditions could produce an issue nearer $13.66 million and an interest cost around 3.94 percent, with annual debt-service payments a little over $1 million. "In today's market, the interest cost would be something like 3.94%," Keane told the council.
Council members asked whether the new debt would affect the city's credit rating; Keane said it would not and described the issue as similar in structure to a prior 2020 highway allocation bond that received a double-A rating. The ordinance proceeded through first reading; council voted to suspend the rules and adopt the ordinance on final reading the same night by an 8–0 vote.
Under the ordinance language presented, the council authorized issuing bonds in one or more series, directing staff to proceed with rating, marketing and a competitive sale, and naming a mayoral designee to award the sale to the most favorable bidder. Keane outlined a schedule to finish ratings work in late June or early July, go to market in mid-July and deliver proceeds in early August if the council approved the ordinance and waived the remaining readings.
The bonds will fund construction costs and issuance expenses; staff proposed using dedicated public-safety portions of existing sales tax receipts to pay debt service and backstop the issue with limited property-tax authority if necessary. The council approved the ordinance unanimously.
