City of Delafield - The Common Council unanimously approved Monday night the sale of $8.9 million in bonds most of which will pay for the construction of the first phase of a new downtown local government complex.

City Financial Advisor Philip Cosson of Ehlers said interest costs on the loan will be about $275,000 less than anticipated.

He emphasized that the reduced interest costs do not represent a revenue windfall for the city but rather a reduction of the amount of taxes expected to be required to pay off the loan over 20 years.

Cosson said interest payments will be lower than anticipated because of the size of the bond issuance, fluxuations within the bond market, and the city's strong bond rating; all of which attracted national as well as regional financial insititutions bidding for the bonds.

FTN Financial Capital Markets of Memphis Tennessee offered the lowest bid package with interest rates at about 4.1 percent and net interest cost of $4,926,362.

Moody's Investors Service assigned the city as Aa3 bond rating which it said "reflects the city's continued healty financial performance, affluent and growing tax base favorable located between Milwaukee and Madison, and a manageable debt profile despite additional borrowing."

The city will use $7.2 million of the money to construct next year a new public safety building for police and fire departments and remodel the Department of Public Works Garage on West Main Street.

Another $5.2 will borrowed in late 2009 to build a new city hall and library civic center at the existing City Hall site on Genesee Street. The $12.4 million in capital projects was approved by voters earlier this year.

The remaining $1.7million will be used on various capital improvement projects such as the annual street resurfacing program and the purchase of heavy equipment.

The city's total outstanding general obligation debt is $18.6 million, according to Moody's.