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County board approves $730,000 GOB sale for projects, purchases
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By Charlie Warner
Argus News Editor
The Houston County Board moved forward with a $730,000 general obligation bond (GOB) sale when a bid presented by United Banker’s Bank, Bloomington, Minn. was approved. United Banker’s Bank submitted the low true interest rate of 2.339 percent for the three-year bond.
According to Bruce Kimball of Ehlers, Inc. (the county’s bond counsel) of Roseville, Minn., the county received two bids. Kimball said the firm contacted six banks in Houston County, but did not receive any in-county bids. The only other bid was from Wells Fargo Brokerage Services, LLC of Minneapolis for 3.1806 percent.
“The bids came in lower than we had anticipated,” Kimball said. They projected the low interest bid would be around 3.5 percent. United Banker’s Bank bid represents a $16,000 reduction in interest payments from what Ehlers had expected.
The county board decided to use general obligation bonds to pay for a number of items that had to be scratched from the 2009 budget due to state aid cuts that were projected to be close to $1 million over a two-year period. County and city governments were handed a double whammy by the state when legislators imposed a 3.9 percent levy limit for the next two years. One way around the levy limit is to take out general obligation bonds and pay them back through special levies, which are exempt from the state-imposed levy limits.
The $730,000 GOB will help pay for initial work for the new County Highway Department complex- $395,000; the County Solid Waste Department- $72,000; and the County Sheriff’s Department- $249,000; for a total of $716,000. The remaining $24,000 includes interest and underwriter’s costs.
Highway complex financing
Kimball then walked the county board through the financing options for the highway complex, which has been estimated at $8 million.
The county can either go the A- general obligation capital improvement plan bonds route or B- the Houston County EDA lease revenue bonds route.
Option A would include a 4.44 percent estimated true interest cost, $616,900 estimated annual debt service and requires a public hearing process and a 30-day reverse referendum window.
Option B would include a 5.39 percent estimated true interest cost, $706,800 estimated annual debt service, lease payments to the EDA subject to annual appropriation by the county board, and requires a debt service fund.
“We won’t have to worry about this once we get that stimulus money we applied for,” Commissioner Dave Corcoran said.
County Finance Director Casey Bradley replied that the county has not received notification if they have been approved for the Fast Start Project program sponsored by the Federal EDA. Houston County’s highway complex project is one of just four projects in the state that was submitted before the deadline. According to all indications, the county has a very good chance of receiving at least 50 percent funding for this project by the federal government.
You can contact Charlie Warner at
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