The Grand Rapids Five Year Construction Plan dominated discussion at last week’s city council meeting.
City Finance Director Barb Baird presented the reconstruction plan to the council. She began by noting that, under Minnesota law, the city is authorized to prepare a street reconstruction plan for five years.
In June of 2014, the council approved a five-year plan for the time period of 2016 through 2020. The plan, however, did not address two projects that are currently underway: the 5th Street North reconstruction project and the 8th Avenue Northeast overlay, reclamation and reconstruction project.
Baird added that the city can issue general obligation bonds to finance the construction when special assessments won’t cover 20 percent of the cost of the work. It’s anticipated that special assessments will cover about 15 percent of the cost. Issuing bonds would make $2,230,000 available to cover cost associated with the two projects, which are ongoing. The total combined cost is anticipated to be $4,175,332. Previously, former city engineer, Julie Kennedy had estimated the cost to be about $3.2 million. The council voted unanimously to amend the five year plan and issue the general obligation street reconstruction bonds.
Todd Hagen from Ellers & Associates followed Baird at the podium. Ellers & Associates represent the city as financial advisors in the bonding process.
Hagen outlined some of the details involved in selling the bonds. The bonds would be 15-year notes. He said that issuing the bonds this late in the year would prove advantageous to the city because the city would likely not have to pay any interest for the remainder of this year.
Hagen added that banks could compete for purchase of the bonds and that would likely lower the interest rate. The city will have the option of renegotiating the terms of the note after nine years, Hagen said. “It’s a good time to be borrowing; interest rates are at a historic low.”
Interest rates will come in at about 2.15 percent over the 15-year life of the bond, Hagen said. The note will be paid back from special assessments and property taxes. He concluded his remarks by announcing that he would get back to the council with the two lowest bids on Sept. 12 and that the sale would close on about Oct. 6.
In other business, the council:
• Entered into an equipment rental lease agreement with the Itasca Curling Club.
• Agreed to exchange property located in the vicinity of Showboat landing for property that is presently owned by Bland Paper Company at the intersection of Golf Course Road and County Road 76. The city will pay $96,812.50 to Carlton Companies for the demolition of the former public works/showboat complex as part of the deal.
• Amended the job description of Administrative Assistant in Community Development Department resulting in a wage increase to $24.20/hour retroactive to January 1st.
• Appointed Bruce Baird to the position of Public Works Maintenance 1.
• Authorized permanent status for Building Inspector Jon Peterson.