Lansing City Council awards general obligation bonds, hears Main Street Lansing update and approves insurance renewal
by Joshua Sharpe
The Lansing City Council met in regular session with all in attendance Monday, November 17 to address a full slate of agenda items. The council approved the awarding and scheduling of the 2025 bond issue, renewal of health insurance coverage, the sale of surplus equipment, and steps toward addressing well and pumping system concerns, in addition to hearing a detailed Main Street Lansing report.
BOND BID RESULTS
The council welcomed Maggie Burger of Speer Financial to present the bid results for the city’s new General Obligation Corporate Purpose Bonds. Burger explained that bids were taken that morning in a competitive sale window and that four institutions submitted offers, describing that as a “robust response” for a community of Lansing’s size. She announced that Bankers Bank of Madison, WI, acting on behalf of Kerndt Brothers Bank, submitted the winning bid with an actual interest rate of 3.4737%, telling the council that Bankers Bank had called to emphasize how strongly Kerndt “wanted to buy this deal,” which is why “their interest rate is significantly lower.”
Burger walked the council through why municipal borrowing costs differ from consumer lending. She explained that “the reason you can borrow money at 3.47% and we can’t all go to the bank and borrow money (at that rate) is you are able to issue tax exempt bonds,” adding that when the city pays interest, the underwriter “does not have to turn that in to federal income tax,” which allows Lansing to “issue debt at a little bit lower rate than probably the retail rate that you or I might see at the bank.”
She reported that “you are issuing $805,000” in bonds, and that the winning bidder took them at a price of just over $802,000, staying within the allowed underwriter discount. Burger noted that the city’s rates are very favorable in the current market, saying the debt would carry coupons “from a 3.3 (percent) down to a 3.5 (percent),” while other bidders - including UMB Bank, Northland Securities, and Bernardi Securities - submitted proposals that ranged higher. Councilmember Steve Murray thanked Burger for the clarity, telling her, “You did a good job of explaining it, so thank you.”
With the bid presentation complete, the council considered Resolution 1068, which formally awards the General Obligation Corporate Purpose Bonds, Series 2025. Burger outlined the following steps, explaining that “tonight you’re locking in the interest rate. This is all locked in,” and noted that on December 1, the council would pass the remaining resolutions and sign closing documents. She added that “the closing will occur on December 16,” at which point the city would receive the bond proceeds.
After a brief discussion, the council approved Resolution 1068, confirming Bankers Bank/Kerndt Brothers Bank as the successful purchaser and authorizing legal counsel and staff to proceed with the closing process.
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