Fiscal Note
This resolution authorizes the issuance of up to $137,910,000 in general obligation promissory notes and an irrevocable property tax sufficient for the purpose of paying principal and interest on the notes. These notes will be used to finance current year projects and programs authorized in the 2025 adopted capital budget. A description of the specific expenditure purposes is included in the resolution. The total amount includes cost of issuance.
The notes will be structured with a tax-exempt series of 10 and 20 year amortization period, with a tax increment financing series of $3.7 million, that may be either issued as taxable or tax-exempt debt.
As was the case with the 2024 debt issuance, the 2025 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 6.5 percent for taxable debt. Under the resolution, the Finance Director is authorized to certify that the qualifying low bid based on the parameters. The Mayor and City Clerk are authorized to approve the sale as certified by the Finance Director. It is expected that the sale will occur prior to September 30, 2025. The authority granted in the resolution expires on December 31, 2025.
Interest on the $137.9 million is estimated to total $44 million over the repayment period of the notes. Annual principal and interest payments (debt service) on the notes are estimated to be $19 million in 2026 and gradually decline to $14 million by th...
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