Council approves prepayment of two older bonds to save interest costs

The Monticello City Council voted to adopt a resolution to call and prepay two existing general obligation bonds — series 2015B and 2016A — as part of the city's 2027 budget and debt strategy.

Finance staff member Sarah explained the technical details during the presentation: "There are 2 bonds that are out there, that we are proposing to have called. That is a technical term for prepaid. It is the 2015 b and 2016 a bonds." She said both bonds currently mature in 2030, and that the early redemption would occur on the next scheduled payment (Dec. 15). Sarah said the prepayment would use existing debt service fund balances plus transfers from the liquor store and DMV profit lines.

Council members asked about the dollar savings from prepaying the outstanding maturities. Sarah said the four years being called would save "about $79,000 total in that interest, plus there are annual disclosure fees..." Council approved the resolution by voice vote after a motion and second.

The prepayment reduces the city's future interest payments and modestly reshapes debt service timing going into the public-works bonding and 2027 levy discussions. Staff indicated additional visuals and a chart of remaining bonds will be posted with the budget documents.