City council approves bond sale
Raises electric rates three percent
Monday, May 27, 2013 12:01 PM
On May 21, the Spring Grove City Council voted to authorize the sale of $2,725,000 in 20-year general obligation (GO) bonds to finance this summer's Main Street project. The bid opening will be June 18, the same date that offers will be presented to the council.
Based on actual roadwork bids, the bond amount has been adjusted to anticipate $3,411,873 in construction costs. That figure is reduced by a $1.5 million contribution from the Minnesota Department of Transportation (MnDOT).
Engineering for the project is estimated at $592,883. A contingency fund of $150,000 is included in the bond amount. Issuance expenses total $64,563.
Michael Bubany of David Drown Associates explained the bonding process to the council. He said that according to latest estimates, paying off the 20-year bond would impact a typical $150,000 home by $25.68 per month.
The single bond consists of two parts. The "improvement" section totals $700,000. For that portion, Bubany said that the city will assess benefiting properties $140,000.
Those funds will be collected over life of the bonding, commencing with taxes payable in 2014 at an interest rate 1 percentage point above the city's net effective borrowing rate.
The bulk of that part of the bond payments will come from the tax levy, at an estimated cost of approximately $38,000 per year.
The "utility revenue bond" portion requires the city to pledge utility revenues toward repayment of that part of the bond issue, Bubany explained. That part of the bond payments are estimated at approximately $139,000 per year.
"It matters what (interest) rates are on June 18," Bubany said. His latest figures showed a .292% recent increase in the estimated net effective interest rate. That translated into a 53 cent-per-month increase in total impacts for the above-mention example home.
Bubany added that the city will be able to use the bond monies to reimburse itself for project engineering costs that have been paid to-date from cash reserves.
Contacted after the meeting, City Clerk/Treasurer Erin Konkel reported that the city has already paid $370,162 in engineering fees, with another invoice for $15,662 due before bond monies arrive.
Electric rates increased
Council members voted to pass along a 3 percent increase in wholesale electric rates to customers.
The increase will not be to overall electric bills, but to kilowatts (power actually used) portion only. Councilmember Lorilyn Dehning reported that she had studied the effect of the hikes from Tri-County Electric Co-op and determined that by passing along the 3 percent rate increase the city will be able to offset the difference.
Officer staffing approved
The council voted to allow roster officer Timothy Irwin to be scheduled to work as-needed.
According to previous statements by members, those hours would typically include covering vacations and emergency situations. There was no discussion on the matter, and the vote was unanimous.
Summer Rec hires made
The council voted to hire three full-time and two part-time Summer Recreation employees. The vote was unanimous, and there was no discussion. Blaine Storlie, Harrison Speltz and Tanguy de Monval will work full-time hours while Aryn Jahnke and Stephanie Jaster will work part time.
Well building repairs approved
A $1,131 bid from T-N-T Painting and Construction to make repairs to the well No. 1 pump house was accepted. Damaged roofing will be removed and replaced (including drip edge and felt) and new doors will be built and installed.
Liquor store sign approved
Several designs for new signage at the city owned Corner Store were reviewed, and one sample from Robin Bartell Designs was approved.
The vote was not unanimous, however. Councilman Robert Vogel cast the lone "no" ballot on the sample, stating, "They're all ugly." The cost of the project is estimated at $857.
Truck bids opened
Two bids for a well-used city truck were opened with the higher one approved. The 1993 Chevrolet pickup will be sold for $800.
Next meeting announced
The city council's next regular meeting will be at 6:30 p.m. on Tuesday, June 4, at 168 W. Main Street.