Alexandria gets 'incredible' bids for police station financing

Talk about it

“Incredible” and “wonderful” were the words used to describe the favorable interest rate Alexandria received on the bonds to finance a new police station.

The city council approved the sale of $5.2 million Build America bonds at its meeting Monday night at the recommendation of Terri Heaton, bonding consultant with Springsted, Inc.

The lowest interest rate on the 20-year-bonds, submitted by Cronin and Company, came in at 2.81 percent – more than half a percent lower than Springsted’s estimate of 3.32 percent.

The low rate will shave about $13,000 off the annual levy the city is imposing to pay for the bonds and will save the city about $300,000 over 20 years.

“This is a very incredible interest rate,” Heaton told the council.

“That is wonderful news,” said Mayor Dan Ness.

“It seems like we caught it just right,” said City Administrator Jim Taddei.

Timing was a big factor because interest rates dropped significantly in the last week, according to Heaton.

The bidding was also competitive. The city received seven bids involving 22 financial institutions, Heaton said.

Alexandria also received good news about its financial rating from Standard and Poor’s. It maintained its solid AA-minus rating, reaffirming the city’s sound fiscal management, fiscally prudent leadership and growing tax base, Heaton said.

In other action related to the police station, the council established a procedure for handling “change orders” or unexpected cost overruns during the construction of the facility.

To help avoid delays, Taddei and Ness were authorized to make immediate approvals of minor change orders that don’t exceed 5 percent of a sub-contractor’s original bid.

The contracts range from about $450,000 for the electrical work to $19,600 for curb and gutter.

The city has about $150,000 left in its contingency budget to handle change orders, according to ORB Management, the construction management company for the police station project.

However, most of the work that remains is new construction, which isn’t expected to lead to costly changes.

Council member Cindy Bigger was the only one who voted against the change order procedure. She wanted the council to approve any changes.

“It [the cost] really comes down to us,” she said. “I don’t want to give that up just for expediency.”

Council members are updated on a weekly basis about the project and will be informed of any cost overruns, according to ORB Management.

Other noteworthy topics that arose at Monday’s meeting included Alexandria’s designation as a “Fit City,” a new aerial bucket for Alexandria Light and Power, a 5K/10K run that will help animals, a housing tax levy, a new source of funding for public art, and an impassioned plea from a resident on Birch Avenue for the city to do something about speeders and other drivers who break the law.

Here’s more about those decisions and other items. The council:

--Received a plaque from the governor’s healthcare cabinet recognizing Alexandria as a “Fit City.”

Steve Sviggum, former speaker of the Minnesota House and now commissioner of the Minnesota Department of Labor and Industry, presented the mayor and council with the award.

He commended the city for creating safe routes for children to walk to school, making sure curbs contain cutouts for wheelchairs and bicycles, and for having trails, bike paths and parks.

“It’s an important thing to do…to focus on fitness and provide opportunities to citizens,” Sviggum told the council.

Only a few cities in the state have received the Fit City designation, Sviggum noted.

--Approved a low bid of $101,842 from ABM Equipment for a new aerial bucket device as requested by Alexandria Light and Power (ALP).

The bucket will be used on a truck that was locally purchased, noted Scott Deitz, ALP operations manager.

The total cost of the bucket and truck is about $175,000, which is less than the $200,000 that was in ALP’s budget.

--Approved the Lakes Area Humane Society’s Alexandria 5K/10K Run set for Saturday, September 18 at Big Ole Central Park.

Events include both 5K and 10K runs, a 1K kids’ run for children 12 and younger, and a one-mile dog walk.

No police officers will be needed for the event. Volunteers are assisting with traffic safety.

Kristin Klimek, humane society director, said that 301 people participated last year and this year’s event, the third annual, is on track to draw 400 participants.

All proceeds will go to support the care of animals at the LAHS shelter. For more information, go to www.alexandria5k10krun.com or call (320) 759-2260.

--Agreed to establish the 2011 levy for the Alexandria Housing and Redevelopment Authority at the maximum amount allowed by the state, $201,984.

This year’s levy was slightly higher, about $207,000.

Jeff Hess, HRA director, said the tax represents .0185 percent of the taxable market value of property in the city.

Most of the money, $72,000, will be used to retire the debt on multi-family housing sites. Another $30,000 will be used for GAP financing and $5,000 for application/consultant fees.

A total of $60,000 will go toward salaries and benefits, $10,000 for administrative expenses, $5,000 to replace a computer, and $19,984 for reserves.

Hess noted that the third phase of the HRA’s housing development, The Trails, is now completed. Four homes were sold there this year.

The HRA also administered a state rental rehabilitation program, helping 15 units.

A state program for owner-occupied housing, offering up to $18,000 in assistance for 20 homes, is also moving along nicely, Hess said, with 16 projects in the hopper.

HRA staff also inspected 500 rental units in the city, Hess said.

In addition, the HRA is securing a purchase agreement on a five-acre parcel of land off Pioneer Road near Victor Street where it expects to begin a multi-family housing project in a couple of years, Hess said.

Council member Bigger said she was impressed with how active the HRA has been in taking on projects and putting families in homes.

During the public comment period at the end of the meeting, Virgil Batesole, a resident who is running for Bigger’s seat on the council, questioned why the city was allowing the HRA to levy the maximum amount.

Without citing any specific figures, Batesole said the extra tax burden is a factor in Alexandria’s high foreclosure rates.

Bigger said that the state Legislature allows HRAs to establish levies. She said the main goal of the HRA is to get more families into housing, not out of them.

--Authorized city staff to draft an ordinance that would create an arts advisory committee.

The idea came from the city’s cultural inclusiveness committee as a way to obtain up to $20,000 through the Arts Legacy local government grant program. To tap into the funds, local governments need to establish an arts committee.

The money could be used to bring in cultural or heritage activities or for local public art displays, according to committee member Karin Tank.

Bigger said she liked the idea of public art and noted that art projects in other communities, such as sculpture gardens, are a unique and welcomed addition.

A preliminary reading of the ordinance to establish the committee will be prepared for the next council meeting.

--Listened to Gary Bjorklund, a resident on Birch Avenue, who is concerned about drivers who blatantly disobey traffic laws in Alexandria.

He said that although the speed limit is 30 mph on Birch Avenue, drivers routinely speed by at 45 to 50 mph.

He said he’s contacted the police about the problem and officers have made an effort to address the problem but the speeding continues.

He said he’d like to teach his 2-year-old grandson how to ride a bicycle someday but fears for his safety.

And the problem isn’t limited to Birch Avenue, Bjorklund told the council. Drivers, he said, run red lights, pass illegally on the right, blow through stop signs and cause accidents throughout Alexandria.

“It’s an epidemic in this town,” he said. “People’s disregard for the law is really a problem…I’m concerned for my safety and for my family’s safety.”

Mayor Ness noted that unsafe driving practices are not just a problem in Alexandria but in many other cities as well.

Ness added that because of state cuts, Alexandria is two or three officers short of the number it should have for a city its size.

“Unfortunately, it’s likely we’ll be facing this same predicament for four or five years,” the mayor said.

Bjorklund suggested that ticketing more drivers could be a good source of revenue for the city. Ness noted, however, that the city receives only about $9 from a $140 ticket.

Council members said they understood Bjorklund’s frustrations, noting that they’ve encountered bad drivers as well.

They told him they would forward his comments on to the police chief. They also urged Bjorklund to continue to let police know about illegal drivers.

---Approved a second and final reading of an ordinance that will rescind the city code relating to tattoos, body piercing, body branding and body scarification on January 1, 2011.

Because of action taken by the state Legislature, the state health department will take over the licensing and enforcement of such businesses, said Taddei.

--Passed a resolution recognizing Gardonville Telephone Association of Brandon and Alexandria as the winner of this year’s Business and Industrial Appreciation Day (BIAD) honor.

The city proclaimed October 15, 2010 – the day of the BIAD awards luncheon – as Gardonville Day in Alexandria.

--Agreed to close 9th Avenue between Cedar and Douglas Street on Sunday, September 12 for First Lutheran Church’s annual Spirit Fest Celebration. It will be closed from 7:30 a.m. to 12:30 p.m.

--Ordered a feasibility report to study the possibility of extending city sewer to a home at 1205 Rosewood Lane.

Barb Larson, the homeowner, asked the city to look into the possibility because she is having problems with her septic system.

--Tabled a request by Wally Tischer to allow a used vehicle sales lot at 302 North Nokomis Street.

Tischer requested the city’s planning commission to give him more time to provide additional information on his conditional use application.

His application was extended for 60 days.

--Agreed to hire Emmons and Oliver to conduct an inventory of storm sewer retention ponds in the city at a cost of $13,454.

At its last meeting, the council asked the storm water utility committee to reconsider its recommendation of Emmons and Oliver because a local company, Design Tree Engineering, had submitted a lower price quote of $12,000.

Since then, the companies made presentations to the committee with three council members present and the committee again recommended Oliver and Emmons.

The council voted 4-1 to support the recommendation. Bigger voted against it.

--Was informed that the Alexandria Lake Area Sanitary District will hold an open house at its facility on Nevada Street on August 25 from 1 to 5 p.m.

--Was informed that the Federal Aviation Administration rejected a request from the city of Morris to temporarily transfer funds to Alexandria that it eventually planned to use for an airport project.

Morris originally planned to transfer $74,000. The amount was reduced to $32,343 before the FAA said it wouldn’t accept the transfer.

--Approved an agreement with the Minnesota Department of Transportation to replace the roof at the Alexandria airport’s arrival/departure building.

Ninety-five percent of the $201,177 project will be paid with federal funds.

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