Edwardsville council authorizes $3.79 million in bonds to finance street projects

The Edwardsville City Council voted unanimously to adopt three linked resolutions that authorize the city to issue up to $3,790,000 in general-obligation bonds to finance main trafficway and street improvements and to redeem portions of 2023 temporary notes.

Clayton Kelly, the city’s financial advisor, told the council the financing package would roll about $1,970,000 of temporary-note redemption into permanent financing and add roughly $1,820,000 for street projects, producing a combined financing amount of $3,790,000 on a 20-year schedule. "You're probably looking around a 4% interest rate in today's environment on a 20 year GO bond," Kelly said, describing that figure as an estimate based on current markets and subject to change when the city takes bids.

Bridget Morrison, bond counsel, summarized the three steps covered by the resolutions: first authorize the projects (Res. 20-26-03), then authorize certain charter-ordinance projects (Res. 20-26-04), and finally authorize the bond issuance itself (Res. 20-26-05). "First we have to do our projects, then we put those bonds, and we roll that all together," Morrison said.

Council members asked how the city would respond if market interest rates rose before the scheduled sale date. Kelly said the city could delay the sale if it no longer made fiscal sense, though delaying could increase carrying costs for the outstanding temporary notes and complicate relationships in a competitive sale. "If the next two weeks we see rates skyrocket and it doesn't make sense anymore, then we can absolutely delay the sale date and push it back," he said.

Councilman Millett moved to adopt the three resolutions; each motion was seconded and the clerk called the roll. All roll-call responses recorded on the record were affirmative, and the resolutions passed. Staff said they will return at the April 13 meeting with bids, final interest rates and a final debt-service schedule so the council can lock in permanent financing.

The financing plan covers work already completed under the 2023 temporary notes (including 98th Street phase 1 and Kansas Avenue) and additional street projects identified in the city's capital improvement plan. The city plans a 20-year bond term and staff described the 4% figure Kelly provided as an estimate to be finalized with the bids.

Next steps: staff and the city’s advisors will pursue credit rating work, solicit bids on April 13, and report back with final rates and the debt-service schedule before the city completes the permanent financing.