City to borrow $1.55 million
Financing for capital projects approved
By Angie Landsverk
The city of Waupaca is borrowing $1.55 million to finance part of this year’s capital improvement projects.
The common council unanimously approved the issuance and sale of the 10-year notes when it met on March 5.
All council members were present.
The interest rate on the General Obligation Promissory Notes is 2.67 percent.
“You hit the market at the perfect time,” said Brian Ruechel, of RW Baird.
RW Baird is the city’s financial adviser.
Ruechel said a 3.75 percent interest rate had initially been projected.
The 2.67 percent rate the city received is lower than the current interest rate on a six- to 10-year State Trust Fund Loan of 4.5 percent, he said.
That program’s higher rates and the city’s favorable financial position are reasons why the city went out to market again, Kathy Kasza noted in her staff report to the council.
Kasza is the city’s finance director/treasurer.
Investors are looking for municipal bonds, Ruechel said.
He said the city’s A+ rating from Standard and Poors attracted a great interest rate for the city.
The highest rating from the agency is AAA.
The A+ rating is the same one the city received last year from it.
The fact the city maintained its rating was attractive to investors, Ruechel said.
The city is set to receive the funds on March 26, he said.
Ruechel said the city’s first debt payment is on March 1, 2020. The total interest cost is $280,000.
While the term on the notes is 10 years, the first call date is March 1, 2025, he said.
The projects being funded are the phone system upgrade ($55,000), first phase of Main Street reconstruction ($100,000), Granite Street reconstruction ($40,000), Evans Street reconstruction ($640,000), sealcoating of Appletree Lane and Farm Drive in conjunction with the town of Waupaca ($25,000), reimbursement of last year’s purchase of the former Midtown Motors property ($230,000), replacement of a snow blower ($160,000) and design and construction of a salt shed ($300,000).
The salt shed is to be built on the former Haberkorn Field property, which the city owns.