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File #: 61402    Version: 1 Name: $22,600,000 Bonds Streets and Facilities Improvements
Type: Resolution Status: Passed
File created: 7/15/2020 In control: Attorney's Office
On agenda: 8/4/2020 Final action: 8/4/2020
Enactment date: 8/7/2020 Enactment #: RES-20-00559
Title: Initial Resolution Authorizing Not to Exceed $22,600,000 Bonds by City of Madison for Streets and Facilities Improvements
Sponsors: Satya V. Rhodes-Conway
Fiscal Note
This is an initial resolution to issue 20-year bonds for three major projects included in the 2020 adopted capital budget -- a new Fleet Service maintenance facility on Nakoosa Trail, the second phase of a multi-year update to the Metro Transit bus storage and maintenance facility at 1101 East Washington Avenue, and reconstruction of South Gammon Road. Up to a total of $22,600,000 will be issued for these projects, including the estimated cost of issuance.

The total estimated cost of the projects, along with the borrowing plan for each, is described below:

Fleet Service Maintenance Facility -- $32.4 million ($18.3 million was previously borrowed; $14.1 million will be borrowed in 2020)

Metro Transit Bus Storage and Maintenance Facility Update -- Phase 2 -- $5.5 million (entire amount will be borrowed in 2020)

South Gammon Road -- $5.2 million GO debt share ($505,000 previously borrowed; $3.0 million will be borrowed in 2020)

Due to the relatively large cost impact and useful life of these projects, along with the overall amount of borrowing in 2020 due to major facilities construction and renovation projects, these bonds will be issued with a 20 year repayment period. Debt service on $22,600,000 is anticipated to average approximately $1.4 million annually. This compares with estimated average annual debt service of $2.6 million annually for 10 year promissory notes. Interest costs on 20 year bonds are estimated to total $5.0 million, compared with $2.5 million for 10 year notes. The debt service and interest cost estimates are based on current interest rates on AAA-rated municipal debt and the City’s practice of repaying debt on a level-principal basis. "Level-Principal" means that an equal amount of principal is paid each year (e.g., 10% of principal for 10 year notes; 5% of principal for 20 year bonds), which results in less interest paid compared to a "level-debt service" approach.

The bonds referenced in this initial resolution are for ...

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