Council approves sale of $15.475M in bonds for projects

Published 5:49 am Tuesday, July 9, 2024

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The Albert Lea City Council on Monday approved the sale of $15.475 million in general obligation bonds to pay for various improvements in the city, including $9.8 million approved in a recent referendum for improvements to the city’s recreational facilities.

Bruce Kimmel, senior municipal adviser from Ehlers & Associates, the public finance advisement firm that assists the city in the sale, said they received 10 bids on the city’s behalf in the sale Monday morning and received considerably better interest rates than they had projected, so much so that they were about to capture about $1.2  million in funds through a premium bid without increasing the debt levy.

Kimmel said the low bid came from Baird, out of Milwaukee, Wisconsin, with a true interest at 3.71%. The presale estimate was over 4%.

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City Manager Ian Rigg said the funds will cover the following: two groups of street projects, one for $3.035 million and one for $1.215 million. Projects include this year’s neighborhood improvement project, the state-aid overlay project, the Marshall Street and Sibley Avenue reconstruction, the Seventh Street and Winter Avenue reconstruction and the downtown alley reconstruction. The bonds for these projects will be paid back over 10 and 15 years utilizing special assessments and the tax levy.

The funds also cover $9.8 million for recreational facilities improvements at the arena, theater, city pool and splash pad restrooms, to be paid back over 21 years using the tax levy.  About $465,000 will also go toward the new solar project at City Arena, and $960,000 will go toward the new solar project at the wastewater treatment plant, both of which would be paid off in 15 years using property taxes.

Kimmel said the extra funds received could be used toward project costs or to reduce the levy.

As part of the process, S&P Global Ratings affirmed the city’s AA- credit rating, which he said can be attributed to things such as strong financial management, including strong reserves, and strengthened economic metrics.

Second Ward Councilor Larry Baker asked if there was anything that could be done to improve the city’s rating, and Kimmel said there wasn’t much that could be done, aside from improving demographic levels.

First Ward Councilor Rachel Christensen thanked Kimmel for presenting the good news from the sale. She thanked the city’s finance manager, the city manager and others for keeping the city in good financial management.