CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Pass the ordinance authorizing the issuance of General Obligation Bonds, Series 2026, for an amount not to exceed $41,000,000 (Item 1 of 2)
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DEPARTMENT: Finance Department
SUBMITTED BY: Raymond Munch, Director of Finance
BOARD/COMMISSION REVIEW:
The Financial Advisory Board (FAB) reviews debt issuance plans as part of the annual budget process. FAB supports using bonds as a strategic financing mechanism for capital improvement projects and recommended the debt financing projections included in the 2025-27 utility rate studies.
BACKGROUND:
The other related item on the City Council agenda is:
* 26-0694: Pass the ordinance authorizing the defeasance of outstanding General Obligation Bonds, Series 2018 (Item 2 of 2)
In December 2025, the City Council approved the 2026 Annual Budget and Capital Improvement Program (CIP). The 2026 CIP included $58,000,000 in capital projects without an identifiable funding source. By adopting this budget, the City Council tentatively authorized staff to issue bonds to pay for all unfunded capital projects, with the City Council retaining final approval of any bond sale.
Since 2018, the City has issued bonds using a project reimbursement methodology. This allows staff to analyze capital project spending and make any adjustments to the required borrowing amounts. This practice also allows staff to manage cash flow more effectively and reduce interest costs.
To use this methodology, the City must pass an Official Intent for Reimbursement Resolution for capital projects. This allows projects approved through the annual budget to be included in any future bond sale. The resolution itself does not authorize borrowing; it only reserves the right to fund current projects through a future bond sale.
On January 21, 2025, the City Council adopted Resolution 25-001, making any capital expenditure included in the resolution eligible for reimbursement over the following 18 months. The...
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