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City Council issues bonds to fund street projects

The Albert Lea City Council on Monday awarded the sale of more than $2 million in general obligation bonds, with a lower interest rate than anticipated.

Paul Steinman, with Springsted Inc., the company that oversaw the issuance and sale of the bonds, said Springsted took bids Monday morning. He presented the results of the bond sale to the council that night.

The bond series covers about $2.2 million in general obligation permanent improvement revolving fund bonds that will provide funds for a series of projects, including the reconstruction of 12th and 13th streets, the reconstruction of Prospect Avenue and Katherine Street and the 2012 neighborhood improvement overlay, among others.

The interest rate was bid at 1.59 percent, lower than the 1.99 percent estimated.

Steinman said the city’s credit rating was reaffirmed at AA2, which is two notches below the top credit rating.

He noted some of the challenges the city faces are its reliance on local government aid from the state — which makes up the largest part of the city’s operating revenue — and its modestly sized tax base, yet weak socioeconomics.

Some of the strengths of the city are its conservative budgeting, which has led to substantial reserves, as well as its ability to maintain a balanced operation despite state aid cuts, he said.

In other action, the City Council:

• Accepted bids and awarded the contract for the extension of the sanitary sewer line to the Hill’s Gardens area.

The contract was awarded to Blitz Construction of Byron for about $278,000. The engineer’s estimate was $287,000.

Contractors will be constructing a 12-inch pvc sanitary sewer line connecting the existing sanitary sewer line north of the Dakota, Minnesota & Eastern Railroad line to the area of Hill’s Gardens.

The line would be bored under the railroad tracks, run across farmland and then run into Hill’s Gardens on the east through easements.

The project would bring sewer to 16 properties and could also service 202 acres south of West Main Street in the future.

• Ordered the preparation of plans for the reconstruction of Katherine Street, paving of West Hawthorne Street and spot reconstruction of Betha Larson Lane.

Total project costs are estimated at $366,000.

• Amended the agreement with Mead & Hunt for the Albert Lea Municipal Airport improvements.

A portion of the project, for the airport apron and installation of wildlife fencing

which has led to substantial reserves, as well as its ability to maintain a balanced operation despite state aid cuts, he said.

In other action, the City Council:

• Accepted bids and awarded the contract for the extension of the sanitary sewer line to the Hill’s Gardens area.

The contract was awarded to Blitz Construction of Byron for about $278,000. The engineer’s estimate was $287,000.

Contractors will be constructing a 12-inch pvc sanitary sewer line connecting the existing sanitary sewer line north of the Dakota, Minnesota & Eastern Railroad line to the area of Hill’s Gardens.

The line would be bored under the railroad tracks, run across farmland and then run into Hill’s Gardens on the east through easements.

The project would bring sewer to 16 properties and could also service 202 acres south of West Main Street in the future.

• Ordered the preparation of plans for the reconstruction of Katherine Street, paving of West Hawthorne Street and spot reconstruction of Betha Larson Lane.

Total project costs are estimated at $366,000.

• Amended the agreement with Mead & Hunt for the Albert Lea Municipal Airport improvements.

A portion of the project, for the airport apron and installation of wildlife fencing will be rebid. It is being paid for with 90 percent federal funds and 10 percent city funds.

• Set the interest rate on future assessments to 3.59 percent. The rate is traditionally 1 to 2 percent higher than the rate the city was approved in its bond issuance.

• Had the first reading to amend City Code, Sections 74-86 and 74-87 to clarify that final variance decisions are made by the City Council.