SPICER -- The Spicer City Council on Wednesday approved a bonding option for the Lake Avenue South project. The city will save $11,000 in interest.
The bonding option with Northland Securities Inc. includes a 4.91 percent interest rate on the city's $500,000 in general obligation bonds.
Traci Ryan of David Drown Associates Inc. reported that three financial institutions completed a bidding process Wednesday for the bonding opportunity. Of the three, Northland Securities Inc. presented the best offer, Ryan said.
The previous bonding offer for the project was made during the council's Oct. 22 meeting. It had a 5.1 percent interest rate. At the time, Councilman Ron Schneider suggested the city advertise for bids to see if a better deal could be found.
Ryan told Schneider on Wednesday that the council's decision to advertise for bids essentially saved the city about $11,000 in interest on the 15-year bonds.
The city's financing plan for the Lake Avenue South project has experienced a couple detours since summer.
In late August, the city planned to finance the project by entering a multi-community financing program with Minnesota Rural Water Association for a 4.25 to 4.75 percent interest rate on the bonds. The city would have saved $30,000 in interest over the bonding period.
According to Tribune archives, David Drown reported that the option was terminated after the sub-prime mortgage crisis rattled the markets the following month. The city fell back on the option of bonding on its own, fully aware interest rates would be higher.
The $500,000 in general obligation bonds will be applied to the city's $1.54 million bill for the Lake Avenue South project. The project has stumbled of late due to wintry weather. However, Gregg Kimman of Short Elliot Hendrickson Inc., and colleague of City Engineer Randy Sabart, said the city will have Class 5 gravel laid by the end of the week. The $3.3 million project has provided new utility lines to Lake Avenue South and some roadway improvements.
In other business:
- City Attorney Barry Darval reported the city had not received any medical information from City Administrator Andrea Aukrust regarding her unpaid medical leave. Previous council action stipulated that the city receive more details of her medical condition otherwise she will stay on unpaid medical leave. Spicer can keep her on the status for 60 days.
Darval also reported that Aukrust's attorney still has not filed a lawsuit against the city.
- Councilman Troy Block said the Personnel Committee will conduct interviews next week with acting "emergency, temporary interim administrator" Lori Campbell and candidate Wayne Thompson for the city's interim administrator position.