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Council approves $5.28M in utility revenue bonds and $5.83M in general‑obligation notes to fund capital projects
Summary
City council approved a pair of financings: approximately $5.28 million in electric and water revenue bonds (2026A) and about $5.83 million in general obligation promissory notes (2026B). Advisors warned long‑range modeling could require future water rate adjustments to sustain capital plans.
The Committee of the Whole approved two financing resolutions on March 3: resolution 5‑26 to sell roughly $5,280,000 in electric and waterworks revenue bonds (2026A) and resolution 6‑26 to issue about $5,830,000 in general obligation promissory notes (2026B). Both measures were approved after presentations by municipal finance advisors from Ehlers.
Ariana Schmidt, a member of the Ehlers team, summarized the revenue bond structure, noting the bonds will be pledged to water and electric revenues rather than general obligation backing and will include 10‑ and 20‑year amortizations plus a required debt service reserve. “Over the next 20 years, you are well above that $1.25 requirement,” she said, describing the revenue bond coverage test for debt service (Ariana Schmidt, Ehlers, speaker 10).
Ehlers' analysis showed that when projected future projects through 2030 are included, the water utility’s revenue coverage could dip near 2031 (to roughly 1.11 on the firm’s model). Greg Johns of Ehlers said the city will likely need to consider a water rate case in the coming years to continue issuing debt and fund future capital needs: “this is something to keep at the forefront in the coming years,” he said (Greg Johns, Ehlers, speaker 11).
On the general obligation side, Johns reviewed the tax‑impact analysis and statutory debt limit. The proposed notes would increase the city’s debt service levy by about $283,000 from 2026 to 2027, moving the city’s debt toward roughly 40% of its statutory limit in 2026 and into the mid‑50s percent in the multiyear plan if additional projects are financed. Johns said the revenue bonds did not count toward the statutory GO limit, which is why the city used a mix of revenue‑pledged debt and general obligation notes.
Both resolutions passed; staff and advisors said rating calls and market sale processes will follow. The bond sales were scheduled for early April with the city expecting to present sale results and complete closing later that month.
