At the May 17 meeting of the Preston City Council, Mike Bubany, David Drown & Associates, reported that three bids were submitted for for the issuance of revenue bonds to finance the 2021 Street and Utility Improvement projects.
Standard & Poors issued an AA- stable bond rating for the city before the competitive sale.
The low bid was submitted by Northland Securities, Inc. with United Bankers’ Bank for the issuance and sale of $3,410,000 of bonds. The debt is to be paid back over 15 years at an effective interest rate of 1.4%. Bubany said the net effective rate is 2%, and that he is pleased with the result. A resolution to award the bonds to the lowest bidder was unanimously approved.
Councilman Robert Maust had requested that Bubany comment on the possibility of obtaining additional financing for future projects (2022) while the interest rates are low. Bubany raised several issues including the expense of paying interest before the project expenditures. He said he understood the desire to take advantage of the low rates, but noted it could be problematic to issue bonds for future projects. Bubany suggested later this year he will look at refunding 2014 bonds and at that time it may be appropriate to look into including additional money. By then, there could be cost and other details known for a possible project in 2022.
Some future projects include Branding Iron hill, veterans home bike trail, and the fire department parking lot. The veterans home trail and the parking lot improvement could possibly be paid for without bonding. Other smaller projects listed by Jim Bakken, public works, include the driveway at the power plant and areas around the city shop that need to be repaved. These projects may also be paid for with cash or the cost shared with the utility.
City Engineer Brett Grabau explained the Branding Iron hill may involve a full reconstruction and may involve assessments. He added he was in the process of putting items together to get quotes on these other smaller projects, except for Branding Iron Hill.
Veterans home access
The state’s preferred route to the veterans home site is on Windmill Rd. to the intersection with Overlook Dr. and from there, a drive to the veterans home. The city prefers to come in on Windmill Rd. and then to continue off to the left (before the intersection with Overlook Dr.) onto a drive to the veterans home; there would be no intersection with Overlook Dr.
City staff has held a virtual meeting with the veterans home design team to discuss the access. Initially, a grand entrance was planned from the north, which has since been eliminated to trim costs.
The design includes a stormwater pond which is currently planned to be in the area where the city prefers to construct the new access. Grabau said the city has asked to move the location of the pond over to some degree in order to allow for an access off Windmill Rd.
Maust was adamant that there was no need for an additional stormwater pond as there already is controlled runoff from that hill. The state believes they have to account for added impervious surfaces.
City Administrator Joe Hoffman said the state has agreed to take another look at the access; Hoffman maintained we do not want to do anything to jeopardize the timeline of the project. The state design, as is, provides for an undesirable intersection. Grabau said their plan provides for a large radius, so traffic can go through without stopping. This does not account for residential traffic from the other direction. His main concern is this uncontrolled intersection. “I don’t like the metrics of it at all.” Our plan does go through their planned pond. Hopefully, we can find a reasonable compromise.
Hoffman suggested maybe we could acquire another half acre of land so the pond could be shifted enough to allow for the city’s road plan.
Mayor Kurt Reicks added that the road was not designed to hold up to the amount and kind of traffic this would involve.
Hoffman said they will talk to the Minnesota Department of Veterans Affairs and the project manager about the city council’s view of the road placement. At this point, the city has purchased 16.6 acres for the veterans home. Grabau concluded that he was hopeful that the planned pond can be shifted to the northeast to allow for the city’s preferred access plan, noting “We really want a controlled intersection.”
Other Business in Brief
•An amendment to the city’s Zoning Ordinance was approved. The definition of “family” was outdated. The new definition reads, “Any number of individuals related by blood, marriage, adoption or foster care or a group of not more than five persons not so related living together on the premises as a single nonprofit housekeeping unit.” Councilmen Maust and Collett were against the definition change.
•The revised preliminary plan for Blue Jay Ridge was approved. Planning and Zoning had recommended approval with conditions and after some items were addressed. Grabau said his concerns with construction plans and stormwater have been addressed. City staff has met with Mark Welch and he has addressed the concerns raised by the city; staff recommended approval of the preliminary plat. Welch, owner of the top of the ridge, said he purchased the property a few years ago. He said he will put a plan together for controlling water runoff. He will work with Tom Anderson, who owns the lower section and agricultural fields.
•National Trout Center funding from the city was suspended until the NTC board has a director, a plan in place, and then comes back to request funding from the city. The city has been reducing the NTC funding by 10% per year. Mayor Reicks said nothing has been happening with the center for a year and a half. In 2020 the city appropriated $17,100 to the center. In 2021 the budget for the center was $15,390; as of the May payment a total of $6,412.50 has been paid to the NTC so far this year.
•The next city council meeting will be held on June 7.
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