Lanesboro City Council approves MIDI Loan
Wednesday, February 05, 2014 2:12 AM
On Monday, Feb. 3, Mike Bubany again briefed the Lanesboro City Council at its monthly meeting about the financing options to fund the water system improvements necessary within Lanesboro.
In order to finance the construction of the water system improvements within the city's jurisdiction, the council considered the MIDI Loan against a standard loan. "Rather than being a standard loan, the MIDI Loan is just a bond issue," Bubany stated.
The Minnesota Rural Water Association's MIDI Loan Program provides Minnesota units of government with a quick and low-cost alternative to conventional general obligation bond sales. It is most suitable for debt amounts of up to $1 million, which can be repaid in 15 years or less.
It can be used as a source of interim financing, as is the case in Lanesboro.
Since the loan is more of a bond, there are certain benefits for the city which made it much more appealing than a standard loan. One of these benefits is there is less issuance money spent since there is no middleman. The MIDI Loan will come straight from Northview Bank in Finlayson, Minn. Between $10,000 and $20,000 would be saved versus taking the open market route.
Another benefit is the draw-down option for the interest rate. Bubany described this option as the ability to pay interest on only the amount of money the city draws out. The bank granted the city of Lanesboro the opportunity to draw money out monthly between now and February 2015 to pay for the improvements done within the month. The city is not required to draw money every single month, but they do have that option. Any undrawn funds at the end of the time frame will be credited to the city.
Though discussion arose about the interest payments, it was merely an assumption in case the city would not get the MIDI Loan paid off before Aug. 1. Bubany expressed confidence the city would receive the Public Facilities Authority (PFA) funding and be able to pay off the whole loan as a result.
To emphasize this, he informed the council of an exception to the rule Northview Bank has made especially for Lanesboro. "Usually the MIDI Loan comes with a call option, in which the city could not prepay the loan for a year. However, the bank has limited the call option to Aug. 1 because they are confident the city will get the PFA funding," Bubany declared.
After hearing his presentation, the council voted to approve the MIDI Loan.
At the meeting, the council was updated on the library's recent activities by library board member Keith Eckstrom. Throughout last year, around 14,000 people came through the library and 23,350 items were checked out. This is a 10 percent increase in items that have been checked out.
In addition, the library received six new computers. Some high school students have described them as being the fastest ones on the block.
The library also added a Norwegian book section from the books donated to their inventory. Interestingly, one is the only copy within the United States, so the library had to work with the Library of Congress to establish its number.
On Wednesday, Feb. 5, the Hot Reads Cold Nights reading program kicks off the year with author Lorna Landvick as the special speaker. She is an excellent speaker and comedian, so the night promises to be a fun one.
Friends of the library will be hosting a potluck on Feb. 7 at 6 p.m. to help bring in more support for the library.
On Jan. 21, two options to refine the policies for disconnecting utilities to late-paying customers were discussed. The options included the length of time between payments and the amount of money a customer is behind. One disconnect notice has already been issued within the past month.
The council received a notification that the city website has out-of-date software which must be updated soon or it would eventually become inaccessible. The software in use now was purchased in 2006, making it ancient in technical terms.
The council approved the purchase of new software for $600 in addition to their yearly payment of $1,400 for ongoing support. The installation costs would be included in the yearly fee.
The year began with fewer than average emergency calls for the ambulance service during January, noted Lee Peterson of the ambulance service. Only six calls were made, three of which were trauma cases. The others consisted of simple dehydration cases. The council voted to continue the ambulance contract with Fillmore County.
The fire department made eight calls. Three were house fires and two were vehicle accidents. Rob Wagner thanked the city for its support.
The city has been given 60 days to complete repairs to the fire system which would otherwise violate some state regulations. The total cost would be $700. The cost is divided between a test done every three years for $350 and the actual repairs costing the same amount.
Two positions on the Economic Development Authority board opened up in Lanesboro recently. The council approved Catherine Glynn to fill one of those positions. The other remains open. They also accepted John Dahle to be on the Heritage Preservation Committee.
Finally, the council approved the brew license for Riverside on the Root.