Good bid flows in for Alexandria water project bonds
Good news flowed in with the bond rates the Alexandria City Council approved Monday night to pay for a waterline extension project.
Piper Jaffray submitted the lowest interest rate, 2.13 percent, on the $5.49 million general obligation bonds. That's nearly half a percentage point better than the 2.61 percent rate the city's bonding consultant, Springsted, Inc., estimated a few weeks ago.
The opportunity to bid sparked keen interest. Fourteen bidders initially signed up and 10 ultimately submitted bids, which are all-time highs for the city, noted Terri Heaton with Springsted. Having that kind of response indicates the confidence that the bonding market has in Alexandria's finances, she said.
"We are very pleased to bring that kind of result," Heaton told the council. "We didn't realize it was going to be this great."
The bonds will be paid back over a period of 20 years.
The project will pay for Alexandria's water project in the phase four, part one area of Alexandria Township as part of an orderly annexation agreement.
Despite taking on additional debt from the bonds, the city will retain its stable "AA-" bond rating and the city's financial management practices are still considered good under Standard and Poor's assessment, noted Springsted.
The rating considers key factors such as the city's finances, economic development, land values, overall wealth and its long-term financial planning. The city started planning for these bonds about two years ago, Heaton said.
The fact that Alexandria is a regional trade center and carries a healthy fund balance of about 40 percent of its general fund, also helped, she said.
Heaton had high praise for long-time City Administrator Jim Taddei, who will be retiring this September. She described him as highly organized and the most ethical and honest administrator she's known. "He's truly top drawer," she said.
In other action, the council:
--Agreed to serve as a conduit for LifeLink III Helicopter to receive up to $18.6 million in revenue bonds to buy six medical helicopters. The new aircraft will replace the old helicopters and will be more spacious and capable of carrying a heavier payload. At least one of the helicopters will be housed at the Alexandria Municipal Airport. Other locations include Hibbing, Willmar, Blaine, all in Minnesota, and Rice Lake, Wisconsin. LifeLink is using a public finance authority in order to receive a lower interest rate on the bonds. It won't affect Alexandria's bond rating or capacity. The city won't incur any costs and is under no financial obligations.
--Approved the 2013 annual report from City Assessor Reed Heidelberger. The estimated market value of all property in the city was estimated at more than $1.2 billion in 2012, a 10 percent increase from 2011, according to the report. Construction of 25 new single family homes added to the value, along with 295 residential remodeling permits. This accounted for more than $7 million in value. New commercial and industrial construction added another $6.4 million in value. The city has a nice mix of value with residential property comprising 62 percent of the total value and commercial property about 25 percent, said Heidelberger. Tax-exempt property in the city, such as schools, churches and county property, total nearly $290 million. He also provided market values for neighboring townships of Alexandria -- $325 million (down from $500 million in 2011) and LaGrand -- $553 million (down from $574 million). Douglas County's market value stands at $4.9 billion, a 2 percent drop from 2011's $4.99 billion. Alexandria comprises about 22 percent of the total market value of Douglas County.
--Directed staff to see if the city could enact ordinances requiring those seeking low-income housing in Alexandria to be residents of the city. Council member Todd Jensen made the motion, saying that there is a concern in the community that recent attempts to build more low-income housing units will create a "magnet" to draw other people here instead of helping existing residents. Council member Owen Miller voted against the motion.
--Approved a first-ever 5K run/walk event, "Running for Student Scholarships," that will begin Saturday, September 28 at 8 a.m. at the Alexandria Technical and Community College law enforcement tactical warehouse. Organized by the ATCC Foundation, all proceeds will go to scholarships. Police officers helped determine the route and will stop traffic at two intersections.
--Agreed, with a condition, to block off 9th Avenue between Cedar and Douglas Street to accommodate First Lutheran Church's annual Spirit Fest and Rally on Sunday, September 8. A harvest theme will be used this year and the church plans to offer tractor hayrides, a farmers' market and other family activities. The city approved the request with the stipulation that the church will provide insurance that will also protect the city.
--Approved Barry Ness' request for a $5,000 loan through the city's new downtown redevelopment loan fund. The funds will be used to improve the parking lot at 115 6th Avenue East near Sixth Avenue Wine and Ale. The total cost of the project is $6,671. The loan will be paid back over four years at an interest rate of 1 percent.
--Agreed to install a new stop sign at the intersection of 9th Avenue and Elm Street. This will stop north-south traffic at Elm. The city's highway committee recommended the action.
--Added an alley repaving project between 9th and 10th Avenues, from Broadway to Hawthorne Street, to next year's list of capital improvement projects. The work is estimated to cost $30,000. The highway committee recommended the action. Mayor Sara Carlson recused herself from the discussion because she owns property in the area.
--Was informed by City Engineer Tim Schoonhoven that the 50th Avenue improvement project will be delayed until 2014 because of delays in acquiring easements. Schoonhoven added that the bid climate right now is also unfavorable. The project, which has been approved to receive $1.7 million in federal funding to cover 80 percent of the cost, will be bid this winter and be completed next July.
--Agreed to apply for a grant that would cover half of the cost of buying a man lift. The equipment would be used for high vertical work, such as changing lightbulbs, painting poles and replacing equipment, and would be safer and quicker than ladders, said Interim City Administrator Marty Schultz. He said the city of Willmar is offering to sell a man lift for $11,221. The council directed staff to check with the school district to see if it has a man lift to share and to see if a trailer is needed to haul the lift.
--Directed staff to look into the cost of purchasing electronic tablets for council members to use at meetings. Roger Thalman made the motion, noting that the tablets could reduce paper costs and give the council immediate access to ordinances.
--Recognized State Senator Bill Ingebrigtsen, R-Alexandria, who received a "Legislator of Distinction Award" from the Coalition of Greater Minnesota Cities. The coalition said he played a pivotal role in solidifying a 40/40/20 split between the state, the metro area and Greater Minnesota in parks and trails funding, which began under his leadership, in this year's Legacy Bill.
--Tabled taking action on a request from a anonymous donor who wants to give the city 200 shares of Wells Fargo stock to purchase equipment for the police department. The city is looking into the legalities of the request.
--Approved the following licenses: heating - Treated Air Company of Becker; and temporary liquor license - Eagles Club for selling liquor for events on September 8, October 13, November 17 and December 1.