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Alma City Commission authorizes up to $40 million in bonds after state boosts clean-water aid
Summary
The Alma City Commission voted to authorize up to $40 million in bonds for a 2026 clean-water project after staff reported additional state CWSRF capacity and $2.535 million in extra principal forgiveness; bond counsel said the debt will be repaid from system net revenues and closing will reflect forgiven amounts.
The Alma City Commission on Tuesday adopted a resolution authorizing the issuance of bonds of up to $40,000,000 to finance the city's 2026 Clean Water State Revolving Fund (CWSRF) project.
City staff told the commission the state has increased the city's CWSRF allocation, adding $16,965,000 in traditional loan capacity (bringing traditional loans to about $31,000,208), while the Bipartisan Infrastructure Law allocation remained at $3,592,000. Staff also said the city will receive an additional $2,535,000 in principal forgiveness under the state program.
"We will be funded for this from the state up to the $40,000,000," said city staff (S3) during the presentation to the commission, which framed the additional funds as a significant reduction in the city's net borrowing need.
Bond counsel (S5) described the financing structure and closing mechanics: "This resolution authorizes bonds up to that $40,000,000 amount, pledges the net revenues of the system to the repayment of the bonds, [and] authorizes the city manager to take the needed actions and sign the necessary documents in order to complete the sale to the MFA." Counsel added that the closing will produce a maturity schedule net of any forgiven amounts and that the financing uses a draw-down structure so the city pays interest only on amounts actually drawn.
Commissioners and staff discussed how the bonds will be repaid. Bond counsel said system users' rates and charges will generate the net revenues used first for operations and maintenance and then for debt service. Staff said they will return at the next meeting to present recommended rate structure and timing to cover debt service while seeking to minimize sudden increases for customers.
During public comment, Dave Ringgold, the city's public services director, praised the state funding and staff work: "This was an understatement by immense proportions to get this money for the wastewater treatment plant," Ringgold said, adding that the award will help keep rates down and allow sanitary sewer replacements to proceed alongside street projects.
The commission approved the bond resolution by voice vote. Staff said the city will proceed with final steps to sell the bonds to the Michigan Finance Authority and complete SRF draw-downs as project work is invoiced.
