Dixon approves $10 million lease‑revenue bond to fund police expansion and new fire station

The Dixon City Council on Sept. 1 approved documents authorizing lease‑revenue bonds to raise approximately $10,000,000 in project proceeds to expand the police department and build a new fire station. Municipal adviser Ken Deaker told the council the transaction will use a lease‑leaseback structure through the Dixon Financing Authority and that the city has identified leasable assets to secure the financing.

Ken Deaker of Del Rio Advisors said the city has an underlying S&P rating of "double a minus" and that bond insurance will lift the sale to an insured "double a" rating. "I am happy to report to the council, and I think you'll be very happy to hear this, the city has received a double a minus rating from S and P," he said. Deaker and staff presented an estimated sources-and-uses table showing a $10,000,000 project fund, an estimated principal amount around $9,800,000 and total debt service of about $19,400,000; average annual debt service was estimated at roughly $635,000 and the proposed final maturity date is May 1, 2057, with an all‑in true interest cost near 4.86%.

City staff and the bond team described how proceeds will be held by a trustee and drawn down as project costs are incurred; staff explained impact‑fee receipts and other restricted funds cannot legally be substituted for general‑fund obligations in this structure. Council asked about timing and repayment logistics; staff said pricing is planned in late September with closing in early October so the city will have funds available to start construction in October.

Council adopted the required resolutions and related bond documents in two parts (city resolution and Dixon Financing Authority resolution) by unanimous roll call vote. The action creates a general‑fund obligation for annual lease payments and staff said impact fees collected will be applied to debt service when available but general‑fund budget capacity will be needed if development fees fall short.