After postponing the issue for a couple of months, the Brainerd City Council Monday night approved the issuance of bonds which will be used to finance a utility project.
The bonds will fund the upfront costs of the Brainerd Lakes Regional Airport Utility extension project, which is currently underway. When complete, the project will bring Brainerd Public Utilities water and sewer service to the airport.
The city issued $9,960,000 in bonds to pay for the project's upfront costs. The bonds are 15-year General Obligation Utility Revenue Bonds with an interest rate of 1.83 percent. General Obligation bonds provide the best security for bondholders, which results in the lowest interest rates for the issuer.
"That's a great interest rate," said Paul Steinman, vice president of Springsted, Inc and the city's financial consultant.
The city's application for a credit enhancement program through the Minnesota Department of Employment and Economic Development was approved. The program increases the city's rating on the bonds from AA- to AA+, which is estimated to save $88,000 in interest over the life of the bonds.
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Most of the project's funding will come from annual local option sales tax revenue from the city of Baxter. To fund the project's upfront costs, the city of Brainerd issued bonds.
On March 21, the council approved the bond issuance. Then, about a month later, the city decided to hold off on issuing the bonds until after the end of the state Legislature's current session on May 23.
The city had requested $6 million in state bonding from the state Legislature to help defray costs of the project. The funding did not materialize as the bonding bill died in the final moments of the session.
The city council at a Feb. 22 special meeting on a split vote awarded the bid for the project to Tom's Backhoe Service, Brainerd, at a total project cost of $8,591,721.
The council also approved the $1,075,000 issue of 5-year equipment certificates to pay for four pieces of equipment. The interest rates for those certificates was 1.35 percent. Those four pieces of equipment are:
• Fire engine-$530,000, with $100,000 coming from the department's capital fund.
• Dump truck-$240,000.
• Bucket truck, for BPU-$200,000.
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• Generator, for BPU-$200,000.
In other business, the council:
Authorized Heartland Animal Rescue Team to issue dog licenses at their location and receive a $5 fee to underwrite their costs.
Held the first reading of an ordinance to remove the word "distemper" from the vaccinations required of licensed dogs.
Held the first reading of an ordinance to increase annual license fees for unaltered dogs from $15 to $20, and from $10 to $15 for altered dogs. An unaltered animal is one that has not been spayed or neutered.
Approved a new contractor license for Acme Tuckpointing & Restoration, St. Paul.
Received a written report from Police Chief Corky McQuiston on the department's activity for the month of May. The department responded to 1,556 calls during the month. This compares to 1,562 calls in May of 2015.
Approved a new secondhand automobile license for Josh Imgrund doing business as Imgrund Motors, 303 West Washington St. The license approval is contingent upon approval from the Police, Fire and Planning departments.
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Approved a lawful gambling permit application submitted by the Mission Township Firefighters Relief Association for a raffle to be held Aug. 13 at the Eagles Club, 124 Front St.
Approved an application and permit for a 1-4 day temporary on-sale liquor license submitted by the Brainerd Jaycees for an event July 9-10 at Memorial Park.
Approved a contractor payment to Asphalt Preservation Co. for the 2016 chip seal project in the amount of $131,270. It is the final payment for the project.
Approved a contractor payment to Braun Intertec for the Southeast 13th Street project in the amount of $2,762.
Approved a contractor payment to Tom's Backhoe Service for the Brainerd Lakes Regional Airport utility extension project in the amount of $842,075.
Held the first reading of an ordinance deleting section 820 of the City Code which regulates the placement of phone booths within the public right of way. The city has not received any inquiries about new phone booths in more than 25 years and those that did exist have been removed by their owners.
Called for citizen applicants for the Cable TV Advisory Committee, Rental Dwelling Board of Appeals and Walkable Bikeable City Committee.
SPENSER BICKETT may be reached at 218-855-5859 or spenser.bickett@brainerddispatch.com . Follow on Twitter at www.twitter.com/spenserbickett .
