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Preston City Council Report: Preston's financial situation improving


Fri, Apr 20th, 2007
Posted in Government

Lloyd Johnson, CPA, presented his report on the financial condition of Preston at the end of 2006 at the April 16 city council meeting. Johnson stated that the last four years showed a decrease in outstanding debt. He praised the city staff, Joe Hoffman and Sheila Marzolf, for their help in preparing the statement. He remarked that all the numbers point to an improvement for the city. Net assets are increasing for the city as a whole. Assets, including land, buildings, machinery and equipment, exceeded liabilities by $7,572,453. The numbers reflect a 6.3% increase over 2005.

Thirty-eight percent of the funds to run the city government come from property taxes, forty-three percent comes from intergovernmental revenue (other levels of government), with the balance coming from fees and other sources.

In 2007 major future projects for the city include street and utility upgrades estimated to cost over $900,000, in part to be financed by assessments. The Preston Public Utilities is to finance the north substation project with bonding in the amount of about $550,000. This substation is necessary to provide for the growing power supply needs of Pro-Corn.

Substation Project

Mike Bubany of David Drown and Associates explained to council members the advantages of securing an Electric Revenue Note through the Minnesota Rural Water Association program. Several small cities come together to borrow at the same time and as a group receive an AA rating allowing them to obtain a lower interest rate. In this instance the Public Utilities Commission of the city of Preston could obtain a 4% interest rate on a $580,000 note for the construction of the new substation described above. This would save about a half point of interest for the duration of the note or approximately $10,000. Preston Public Utilities is interested in running the note through the program to achieve the lower rate.

Bubany advised council members that it is necessary for the city council to adopt a resolution in concurrence for the note to be issued. City Administrator Joe Hoffman said that, even though the Preston Public Utility Commission acts separate from the council, when the commission issues debt it requires a concurring resolution from the council. The resolution was adopted. Bubany expects that the Utility Commission will pass their resolution on April 24.

Pro-Corn Expansion

A public hearing was held on Pro-Corn's request to have Simonson Drive vacated in Industrial Park for their expansion of three more grain bins. No citizen comments were made at the hearing. Hoffman said that Pro-Corn has purchased all the lots along Simonson Drive. The council approved the vacation of Simonson Drive.

In order to build the grain bins the size planned by Pro-Corn, the city council would need to grant a variance. In Pro-Corn's application for the variance it was noted that the maximum height allowed by ordinance is 75 feet. The application notes that the bin height will be 86 feet with an 115 foot peak, with the maximum height of the leg being 141 feet.

The Planning and Zoning Committee determined that the bins would have an adjusted height of 106 feet and recommended that a variance be approved for the additional thirty-one feet. Hoffman suggested that Pro-Corn decided to expand with taller bins to save land area and still achieve the needed capacity. The council approved the variance as recommended by Planning and Zoning.

City Entrance Signs

Deb Hoffman presented the council with drawings of the proposed entrance signs and requested that they approve a resolution allowing for the limited use of the Hwy 52 right-of-way for the location of the two signs, one north and one south of town. The council approved the resolution for the limited use permit from the commissioner of transportation of the state of Minnesota to place the signs along Hwy 52 within the city. Kelly Printing will do the lettering and the silhouette on the signs. Hoffman expects the signs to be in place sometime this year.

Board of Appeal and

Equalization

Fred Horihan from the Fillmore County Assessor's Office made himself available for the annual Board of Review. Horihan noted that real estate prices for homes have been pretty stable and that generally values are not decreasing. Commercial values are up about ten percent. Agricultural land has a significant increase due to the increased price of corn.

No citizens were present to air their concerns. Horihan noted that it has been a relatively quiet year with few citizens protesting their property taxes at the equalization meetings.

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