The city of Brainerd will hold off issuing bonds for a construction project until after the end of the state Legislature's current session on May 23.
The city has requested $6 million in state bonding from the state Legislature to help defray costs of the Brainerd Lakes Regional Airport utility extension project, taking place this summer.
The city is planning to issue $10,715,000 in bonds to pay for the project's upfront costs, with the bond issue being approved by the council at its March 21 meeting. Council member Mary Koep Monday said the city will postpone the bond issue until it knows what, if any, bond funding the project will receive.
The city would have typically issued the bonds at the Monday meeting, but now will wait to issue the bonds until the June 20 regular meeting or a special meeting on June 13.
There will be project costs to cover between now and the bond issue, Koep said, so the city will work with Brainerd Public Utilities to cover those required payments. In a Personnel and Finance Committee meeting prior to the regular council meeting, Finance Director Connie Hillman said the amount of those payments depends on the work that's completed, which is contingent upon the weather and the start date.
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In other bond news, the city's AA- bond rating with a stable outlook was confirmed by the rating agency Standard & Poor's. Also, 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.
The Brainerd Lakes Regional Airport utility project, scheduled this summer, will bring BPU water and sewer service to the airport. Most of the project's funding will come from annual local option sales tax revenue from the city of Baxter.
It's anticipated 100 percent of the debt service will be paid for through a combination of Baxter LOST revenue and utility revenues. Brainerd's LOST revenue can't be used to fund any portion of the project until 2009 wastewater treatment plant bonds are paid off. Baxter's LOST contribution will be $8 million, $500,000 of which has already been paid to Brainerd.
SPENSER BICKETT may be reached at 218-855-5859 or spenser.bickett@brainerddispatch.com . Follow on Twitter at www.twitter.com/spenserbickett .
