SPICER - Refinancing a 2006 street improvement bond will save the city of Spicer $77,000 over the next decade.
At their meeting Tuesday, the city council approved the refinancing, which will replace the initial interest rate of 4.6 percent with a new average interest rate of about 2 percent.
City Administrator Leslie Valiant said the city will see net savings of 5.3 percent in interest payments for the $1.49 million bond, which was initially issued four years ago.
That represents "actual savings" after the cost of the transaction, said Valiant.
Under this type of "cross over" bond, which is called a permanent improvement revolving fund bond, the savings must be in the 3 to 5 percent range in order for government entities to proceed with refinancing.
Because of the favorable interest rate, Spicer's savings will exceed the top end of the margin, said Valiant.
Refinancing the bond will not extend the bond payments, which will end in 2022.
The council also approved a resolution that names the city of Spicer as the trustee for the Dethlef Center. The action was taken following a favorable ruling Oct. 15 from District Court Judge Don Spilseth.
Final approval is still needed from the state attorney general.
When the Dethlef Center was built about 20 years ago, it was done with money and land that was left to the city by William Dethlefs.
The court established a trust at that time, with individuals assigned to serve as trustees to administer the property.
During the years, different individuals served in the role of trustee.
With an estimated $300,000 in improvements needed at the Dethlef Center, which serves as a senior dining nutrition site, Valiant said the Attorney General's office recommended that the city become the trustee in order to streamline the process for using the funds and maintaining the building.
Currently, trustees must appear before the court, attorney general and county at least once a year to get expenses approved and to file reports, which involves attorney fees. With the change, reports would be filed directly to the state, Valiant said.
"It'll streamline the whole process," she said, adding that it's quite common for public entities to be a trustee.
The city will have greater flexibility in using the trust funds to maintain the building without the expense of the building being put on the shoulders of taxpayers, said Valiant. She said the trust fund money will only be used for the Dethlef Center.
The city has received a grant that will help fund some repairs, including improvements to windows and the heating and lighting system.
In other action, the council agreed to table action on a social host ordinance. The city is considering an ordinance that is similar to one approved earlier this year by the New London city council.