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County passes opportunity for stimulus funds to municipalities


Fri, Oct 16th, 2009
Posted in Government

Mike Bubany, David Drown Associates, described the pros and cons of the Federal Recovery Zone Bonds to the county board at their October 13 meeting. Fillmore County was one of 55 Minnesota counties to receive an allocation. The county was allocated $861,000 for Recovery Zone Economic Development Bonds for public infrastructure and $1,291,000 for Recovery Zone Facility Bonds for qualified private development. The question is if these bonds would be the best fit for the county and if the county has a project that would qualify. Bubany advised not to find a project just for the sake of funding a project.

Cris Gastner, EDA, said there is some fluidity in the details. Bubany acknowledged there was differing information in terms of process. If the county were to pass them to the cities, some people interpret the language of the act to require a joint powers agreement, others see only the need for a simple allocation to other government bodies in the county.

Bubany explained the recovery bonds issued as taxable bonds would appeal to a larger pool of investors including foreign investors who can't take advantage of a tax exempt rate. The federal government would reimburse 45 percent of the interest. However, the use of these bonds would make the government unit using them subject to a Davis Bacon law requiring them to provide the prevailing wage which could add five to 10 percent more to the total project cost. Bubany expects it would cost about the same or a little more than traditional bonding.

Bubany suggested Build America Bonds where the federal government would reimburse 35 percent of the interest on a taxable bond could be of some benefit where a one-half point of interest could be saved in a straight up situation. These bonds would not be subject to Davis Bacon. He thinks this program would be more attractive. This program ends the end of 2010.

The county could use the allocation themselves, pass it to other government units or businesses within the county or turn them back to the state. Commissioner Duane Bakke said he didn't see a project for the county that would qualify as he didn't think a road project would be eligible. Therefore, they should give notice to the municipalities that the county is willing to pass the allocation on to them. Chairman Chuck Amunrud agreed the county was unlikely to use the allocation and notice should go out to the cities and EDA so they could have the opportunity. Commissioner Randy Dahl suggested the fair way is first come, first serve, but commissioner Marc Prestby felt projects should be prioritized.

The board voted to contact the municipalities through their city administrators by e-mail and place information on the county web page. It will be suggested they contact Cris Gastner for more information. Bonds must be issued by January 1, 2011.

Other Business In Brief

• Cathy Enerson, Preston EDA, had asked the board to adopt a resolution showing their support for the development of a Preston National Trout Learning Center. Bakke asked if the DNR was aware of the effort. Gastner said they were and they were in support of the development. The center would strive to educate the public about trout, coldwater streams, the driftless area and the natural and historical area of Southeastern Minnesota and would add to tourism and the economy in Preston, the county and the region. The center would be modeled after the Wabasha National Eagle Learning Center. The resolution in support of the center was adopted.

• An agreement was approved for a jail vending machine service. Individuals would have a jail debit card. Sheriff Daryl Jensen explained it would simplify the sale of typical vending machine items and also create a small revenue stream which will go toward paying the monthly $250 fee to have the machines and systems. It is a three year contract. Commissioner Tom Kaase said it gives greater accountability along with the ability to pay for itself.

• The board approved the tax forfeiture sale list which includes two properties, one in the city of Mabel and one in the city of Wykoff. The sale will be held in the lobby of the Fillmore County Courthouse, in Preston on Tuesday, November 10, at 1:30 p.m.

• The purchase of an 84-inch 3045 Boomer Super Steer mower was approved from Hyland Motors for use at the county airport for $57,883.50. It was the low quote of its kind, but not the low of all four quotes submitted. Two of the quotes were for a 4320 John Deere with a 72-inch mower deck. It was recommended to go with the Boomer Super Steer because of the larger deck and the much tighter turn capabilities to trim around the large number of runway lights. The purchase was approved with one vote against by Prestby.

• Robert Goede, Minnesota Counties Insurance Trust, gave an in depth presentation on risk management with joint powers and insurance to the board and many department heads to limit liability exposure.

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