Board sells bonds for jail
"Today was a good day to sell bonds."
That's what Todd Hagen from Ehlers and Associates told the Douglas County commissioners at their regular board meeting Tuesday morning.
Ehlers and Associates is the independent financial advisory firm in charge of selling bonds for the Douglas County jail project.
After receiving 10 different bids, the bond sale was awarded to RBC Capital Markets in the amount of $12.9 million plus the cost of issuance, which was $53,000.
Hagen told the county commissioners that, "This really worked out well. Receiving 10 bids is phenomenal."
The interest rate on the bond went better than expected, Hagen noted, which pleased the commissioners. In February, it was projected that the interest rates could be as high as 5.35 percent. After the results of the sale came in, the low bid had an interest rate of 3.89 percent, which saved the county more than $543,000 over the highest bid, which had an interest rate of 4.27 percent.
Hagen also shared other good news with the commissioners about the county's credit rating, which was bumped up to an AA rating from Standard and Poor's, a bond rating agency.
In its opinion, Standard and Poor's noted that the AA rating reflects the county's:
Status as a regional economic center in west central Minnesota.
Good wealth and income levels.
Healthy financial operations supported by very strong reserve levels.
Moderate overall debt burden with limited capital needs.
Hagen explained that having a higher credit rating helped the county get a lower interest rate.
He complimented the county commissioners on their new rating and presented them with a framed certificate from Standard and Poor's.
The board voted 3-0 to approve the sale of the bonds. (Commissioners Paul Anderson and Norm Salto were not present for the sale of the bonds, but were present during the regular portion of the meeting.)
Work should begin on the new jail project after Memorial Day. It will be located at the site of the public works building along 3rd Avenue West.
In other action
During the regular board meeting, after a recommendation from County Attorney Chris Karpan, the commissioners decided to approve the temperature controls contract for the new jail to the lowest bidder - G&R Controls.
The contract was not awarded with the rest of the jail's bid categories at last Tuesday's, March 17, special meeting because representatives from the second-lowest bidding company - Johnson Controls, Inc. - made a plea to the board to award the contract to them.
Karpan told commissioners that the only time they can turn down the lowest bid is if the contractor is not qualified to do the work. He explained that G&R Controls was pre-qualified and that if the board didn't accept the company's bid, there could be legal ramifications.
In a 5-0 vote, the board approved bid category 26 - controls - to G&R Controls in the amount of $272,700.