City approves $6.35 million in borrowing, will increase street improvements
The Hudson City Council on Sept. 16 authorized the sale of general obligation bonds and promissory notes providing a total of $6.35 million for capital projects and debt refinancing in 2013 and 2014.
Most of the $3.49 million from the sale of 20-year bonds will be used to finance a more aggressive schedule of street improvements this fall and into next year.
The sale of 10-year promissory notes will bring in $2.86 million, with $960,000 going to refinance notes issued in 2007. BOSC Inc. of Milwaukee had the winning bid to issue the notes, offering a true interest rate 1.86 percent.
The annual interest on the 2007 notes was about 3.7 percent. The refinancing will result in a savings of $74,326 to the city.
The Baird financial firm of Milwaukee was awarded the sale of the bonds after offering the low interest rate of 3.3 percent. Just one other firm, BOSC Inc., made a bid for the bond issue.
A breakdown of the uses of the bond proceeds shows nearly $2.1 million in spending on street projects in 2013, and $663,000 for street resurfacing in 2014.
Scheduled for resurfacing this fall are:
--Hanley Road, from Namekagon Street to Carmichael Road and from Heggen Street to O'Keefe Road;
--Gateway Boulevard, from Crest View south to the Menards store;
--O'Keefe Road, from Crest View to Mayer Road; and
--The residential portion of Crest View Drive.
Sean Lentz of Ehlers Inc., the city's financial advisor, said the favorable interest rates that Hudson received on its debt issues were due in part to Moody's Corp. affirming an Aa2 bond rating for the city.
Moody's made its decision after an hour-long phone conference with city officials a couple of weeks ago.
Moody's said the bond rating reflected "the city's moderately sized and somewhat affluent tax base, favorably located near the Twin Cities metro area."
The credit-rating company also cited Hudson's "stable financial operations, supported by healthy reserves, and a modest debt burden" in justifying the Aa2 rating.
Lentz said that while there has been a slight increase in interest rates, they are still near a historical low.
Mayor Alan Burchill commended City Administrator Devin Willi, Finance Officer Neil Soltis and Community Development Director Dennis Darnold for their performance in the conference call with Moody's. He said they were prepared to answer all of the questions put to them.
Burchill said the availability of land for future development in Hudson also played a role in the positive bond rating. Hudson's rating is just two steps below Moody's top rating of Aaa.
"Thank you. I'm really happy with those interest rates," Burchill told the city officials and Ehlers representatives in attendance.