The Appleton Redevelopment Authority met 02/12/2025. They spent about 12 minutes receiving an update from Baird representative Brad Viegut on the bonds for the Fox Cities Exhibition Center. Per Mr. Viegut, “We’re clearly on track to retire these bonds much earlier than the original amortization schedule indicated.”
I’ve prepared a transcript of the discussion for download:
Mr. Viegut told the ARA that the principal payments on the bonds from 2027 to 2051 are eligible to be prepaid at the city’s option. They aren’t required to be pre-paid but they can be if there was surplus cash or interest rates were low enough that it made sense to issue new bonds to replace the existing ones.
When the repayment schedule for the bonds was set up the city had conservatively projected a 3% growth rate on room tax revenues because they didn’t want to end up in a situation where they had to make debt payments than were higher than what the anticipated room tax would be. Additionally, they had created a debt service reserve fund of $2.4 million that could be tapped into in the event that there was a shortfall in room tax revenue. Finally, they had a stabilization fund of $900,000 that could also be tapped into if there was an issue with revenue. Both the debt service reserve fund and the stabilization fund were protection against having to come up with other sources of funds if the room tax revenue fell short. At the end of the amortization schedule, the money in each of those funds would be used to pay off the bonds.
The Covid response resulted in significant disruption to the room tax, but, per Mr. Viegut, “Even with that drop, that downfall in room tax, we never had to touch the stabilization fund, or the debt service reserve fund. That really had to do with the conservative modeling we put together.”
The city was now on track to pay the bonds off ahead of the scheduled 2051 deadline and had debt service savings of $8.3 million.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1256180&GUID=1435935C-B478-4F7D-B355-A447B1226ED8
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