Bond interest comes in well under financial advisor projections
In a unanimous vote the Granite Falls City Council approved the sale of $1.89 million in Electric Revenue Bonds toward the purchase of two hydro-electric generating turbines at the Granite Falls Dam as well as updates to the associated Supervisory Control and Data Acquisition (SCADA) Systems. The expected life of the turbines is 40 years.
Todd Hagen of the city’s Minneapolis-based financial advisor, Ehlers and Associates, presented a pair of bids for the 15 year bonds at the Monday night city council meeting. Northland Securities of Minneapolis proved to be the low bidder, offering an average interest rate of 3.49 percent.
Both the city council and Hagen were delighted by the interest rate, which came in 1.83 percent under projections. The rate allowed the city to reduce the bond issue by $105,000, and will save the city $35,000 per year in interest over original projections.
In sum, the 1.89 percent bond issue will generate $756,649 in interest payments for a total project cost of $2.647 million. Original estimates pegged that number at $3.187 million.
“We’re pretty happy about the results of the bond sale, obviously,” Hagen said.
According to City Manager Bill Lavin, the city will be able to finance the operation without increasing electrical rates.
“With everybody working together its clear we saved quite a bit. You did a good job,” councilman Steve Nordaune told Hagen.
In other news:
•The council approved the first reading of an ordinance that will allow the city to annex property purchased by the Granite Falls municipal Hospital for the site of a planned new nursing home.
The property runs adjacent to Granite Ridge Place which is already within city limits. After a second reading, scheduled for the next meeting, the annexation can go into effect.
•Council approved a proposal from City Engineer Dave Berryman regarding construction engineering services for the relocation of the city’s sanitary sewer lift station at an amount not to exceed $186,000.
•At the recommendation of City Finance Director Mike Betker, the city will solicit proposals for banking services from financial institutions within city limits, namely Granite Falls Bank and Citizens Alliance Bank.
In the past, the city has operated without a banking service agreement or contract, but Betker said he believed the city could realize savings with the new approach.
Contracts associated with the proposal will run five years.
•In a 5-1 vote, with Steve Nordaune as the lone dissenter, council members agreed to contribute a donation of $1,500 to the Granite Area Arts Council (GAAC) for programming. The original request was for $6,400.
Nordaune said that he couldn’t support the donation because he said the organization said it would be self-supportive but now they were looking for additional money.
City Manager Bill Lavin reminded Nordaune that what the organization he was referring to was the Granite Falls Riverfront Revitalization (GFRR) and not GAAC. GFRR has repaid its debt and has not requested on-going support from the city.
Councilman Joe Fagnano acknowledged that GAAC “brings a lot of people into the city, while council member Sarina Otaibi commented that, “This is an organization that works every month in our community to keep the lights on in that building,” in addition to offering broad-based community programming and the facilitation of community events, such as the Ole and Lena Day: Winter Carnival associated Hometown Talent and Variety Show.