Fiscal Note
This resolution authorizes the issuance of up to $173,830,000 in general obligation promissory notes for new money and refunding purposes and an irrevocable property tax sufficient for the purpose of paying principal and interest on the notes.
New Money
These notes will be used to finance current year projects and programs authorized in the 2026 adopted capital budget. A description of the specific expenditure purposes is included in the resolution. The total amount includes cost of issuance of approximately $390,000.
The notes will be structured with a tax-exempt series of approximately $112 million with 10- and 20-year amortization periods, and an estimated taxable series of approximately $32 million, for projects related to affordable housing and other purposes that do not meet the criteria for tax exemption under federal tax law. Of the $112 million of tax-exempt debt, approximately $85 million will be repaid over a 10-year period and $27 million over a 20-year period. Projects supported with 20-year debt include the new Fire Station 6 and South Madison Public Health Clinic to be included in the Park-Badger CDA housing development, as well as the John Nolen Drive reconstruction project.
As was the case with the 2024 and 2025 debt issuances, the 2026 debt issuance is utilizing a recent change to state law that authorizes municipalities to issue promissory notes with a maturity of up to 20 years. The previous maximum allowable maturity for promissory notes was 10 years; borrowing with a longer maturity was considered to be bonds under prior state law. Issuing the debt as promissory notes allows municipalities to forego the initial resolution and other requirements associated with issuing bonds.
The resolution establishes parameters for maximum amount issued (described above) and a maximum true interest cost (interest rate) of 5.0 percent for tax-exempt debt and 6.0 percent for taxable debt. Under the resolution, the Finance Director is a...
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