By Allison Peck
The North Platte City Council approved up to $10 million in utility revenue bonds Tuesday night, but despite the dollar amount, city officials say the action isn't about paying for new projects—it's about reducing the cost of projects that have already been completed.
Mayor Brandon Kelliher said the city routinely uses short-term financing, known as bank warrants, while major water and sewer projects are under construction. Once those projects are finished, the city can replace that short-term financing with long-term municipal bonds that typically carry lower interest rates.
"It's a money-saving tactic," Kelliher said during a Wednesday morning interview following the council meeting. "When you do construction projects, you use what's called bank warrants to pay for those projects. Then once the project is finished, you pay them off with a bond because the bond is generally a percent or two lower interest rate."
The bonds approved Tuesday will primarily refinance utility work that residents have already seen completed, including the West Ninth Street water project, portions of the Adams Street improvements and the Jeffers Street water project.
Although the ordinance authorizes up to $10 million in borrowing, Kelliher said the city only expects to use about $7 million immediately. The additional authority allows North Platte to refinance other utility projects expected to wrap up over the next year without having to start the bonding process over again.
During Tuesday night's meeting, council members questioned why the city wouldn't simply wait until every project was finished before issuing the bonds. Bond advisor Austin Partridge explained that refinancing completed projects now allows the city to take advantage of current interest rates while leaving future projects to be financed when they're complete.
That timing was one of the reasons the council also voted to waive the normal three-reading process.
Kelliher said the city's bond advisors recently recommended moving forward after seeing favorable conditions in the municipal bond market.
"They called us about a month ago and said municipal bond interest rates are looking more favorable," Kelliher said. "Let's go ahead and secure the lowest rate we can because that saves the taxpayers money."
Kelliher emphasized that the process is standard practice for municipalities and not something unique to North Platte.
"This is nothing unusual," he said. "Cities across the country and across our state are doing this all the time. North Platte has done this off and on for many years."