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Lanesboro issues bonds for capital improvement projects


Fri, Aug 22nd, 2008
Posted in Government

The city of Lanesboro has approved selling bonds to finance Capital Improvement Projects that will be done in the next year. Mike Bubany of David Drown Associates, Inc. explained how the bonds will be paid off, and how it will affect the city's tax rates over the next fifteen years.

The projects on Whittier Street and Maple Drive will come to a total of $710,000. The roofing project that will be done to the Community Center building will be bonded at $200,000. The total amount that the city will bond for is $910,000.

Bubany added that the actual costs came in higher than anticipated, and that interest rates have also increased over the last few months. The roofing project came in $80,000 higher than what was budgeted, so to keep the tax rates down, Bubany suggested getting that $80,000 from another source.

The city has an outstanding bond issue right now from 1983, and Bubany said that if the city budgets for it over the next few years, they could have enough cash to pay that off.

Bubany had projected the interest rate to be around 4.693 percent for a 15 year term, adding that it could change in the next couple of months. His projected tax rates for the next few years show that in 2009, the tax rates are a little above the 73 percent base, but then will go below that rate for several years after that, assuming the city pays off the current bond issue. Bubany also advised the city keeps the tax rates right at the 73 percent line to have a cushion of funds to pay for future projects.

For this bond issue, Bubany recommended the city not spend the money to get a Moody's rating, as currently smaller cities are not seeing a better interest rate by getting a rating. There is a call option of February 1, 2017, which means the city makes a promise not to prepay before that date.

City Administrator Bobbie Vickerman believes that going ahead with the roofing project will help with energy costs to the building and it would be worth the money needed for it. The council approved the sale of General Obligation bonds for $910,000.

The council also approved the low roofing bid for the Community Center from Winona Heating and Ventilating Co. for $168,300. Vickerman explained that the original bids had also included the HVAC system that included two boilers, and they now believe they can get by with just one boiler and save money. The council agreed to reject the bids received and re-bid the project with one boiler. Also approved was the bid from WHV, Inc. for an office fresh air exchange system for $5,198 and the Automated Logic System for temperature control for $44,738.

Other Business

• The council agreed that things went smoothly during Buffalo Bill Days and there were few problems. They also agreed that the fireworks were a nice addition to the festivities. Many businesses had reported having the best weekend of the year. Next year, Buffalo Bill Days will be held on July 31- August 2. The following weekend will be Chatfield's Western Days and the Olmsted County Fair.

Eric Bunge thanked the council and others for their help in assisting him and Andy Bunge with making the area north of the Vintage Restaurant look so nice with the landscaping done there.

• Bunge also requested the approval of renting out the two studio apartments above the fitness center. He needs a separate license for that building to have the two units available for overnight or long-term renting. The council approved.

• Vickerman said she is sending 34 junk letters to residents being asked to clean up their property. A public hearing was set up for September 15 for the residents to protest the letters, and clean-up must be done by September 22.

• Vickerman mentioned that the CERT (Community Emergency Response Team) is looking for volunteers in the area. Right now people can contact Jenifer Hungerholt, who is the coordinator for the Lanesboro area.

• Mayor Steve Rahn mentioned that the Park Board is down $10,000 in camping this season. They are working on budget cuts for the next year.

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