The Houston City Council adopted a bonding resolution and approved a loan agreement at their regular meeting September 14. This was the first order of business with newly sworn-in Mayor Krin Abraham.
Mike Bubany, a finance advisor with David Drown Associates, recommended the city issuance of a general obligation improvement note to fund the non-utility costs of the Spruce Street project. The state only funds the strict utility costs. Of the total $1.5 million project, the state funded $1.3 million. The $254,000 of ineligible costs have to be structured as a bond issue.
A public sale of bonds could be done and the project could be bid out like a road project, but Bubany pointed out that it would cost “tens and tens of thousands.” Instead he recommended a direct bank placement through the Minnesota Public Facilities Authority Drinking Water Revolving Fund. This would provide a competitive rate and also reduce the administrative cost for the city.
The interest rates for such an issuance had been locked in at a lower rate earlier. This bond would not be able to be paid off until February 2036. All assessments are to be pledged to this bond. Any money left in the contingency fund of $25,000 could be moved to debt services later.
City Administrator Michelle Quinn noted that some bills have been paid already. The city had passed a reimbursement resolution so any bills already paid will be reimbursed from this funding.
The council approved both the loan contract and agreement for the $269,000 general obligation improvement note at 4.4% annual interest. The maturity date of the loan is February 2042.
Spruce Street and LSLR
Matt Mohs of Bolton & Menk gave an update on the Spruce Street project. The paving of the street has been delayed a week. Concrete work needs to be completed first; the planting of trees and landscaping will follow after paving. Completion is anticipated by September 21.
PFA (Public Facilities Authority) is “way behind schedule” according to Mohs. The city’s funding has been approved, but the paperwork has not yet been received. Mohs feels this is because PFA is understaffed.
The LSLR (lead service line replacement) plans have been approved by the state. The current market conditions are affecting bidding. Mohs recommended waiting to put the project out for bids until October or November with construction beginning next spring.
Mohs informed the council that he and Michelle Quinn have been in contact with MDOT regarding a trunk highway project in a few years. MDOT is willing and able to look at what the Minnesota Design Team suggests.
Other Business
In other business the council:
•Approved the final Minnesota Design Team contract for their upcoming visit September 24-27;
•Adopted the preliminary budget and total tax levy of $629,600; Quinn noted that she does not expect that levy to be reduced before it is finalized in December;
•Scheduled the Truth-in-Taxation hearing for December 14 at 6:15 p.m.; this is the same night as the regular December council meeting;
•Approved a request from American Legion Post 423 for a One to Four day on-sale liquor license for the Valley View Foundation’s annual fund raising event on October 3 and the Regional Meeting of the Lions on November 19; both events will be held at the Houston Community Center;
•Approved a 10% pay increase for City Administrator Michelle Quinn; Quinn’s salary had been far below that of city administrators in cities of the same size;
•During the action Items portion of the meeting, Mayor Abraham proudly pointed out the large circulation stats for the Houston Public Library, noting that the funding formula is based on library use.
Department Reports
PWD Josh Hungerholt reported that the city continues to install new water meters. He also shared that a new three-drawer cooler the same size as the previous cooler has been installed at the community center. The new cooler is lockable and has an on-off switch. The city shop now has a much needed new computer.
Police Chief Brett Hurley reported that he and Officer Curtis Chapel will be attending a two-day refresher course in early October.
Fire Chief Byron Frauenkron informed the council that potentially three firemen will be retiring soon. The department is actively accepting applications at this time.
City Administrator Michelle Quinn encouraged the council to sign up for the Minnesota Design Team dinner which will be held September 25.
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