Spicer preparing for spring restart of Lake Avenue South construction; work was halted in November due to weather
SPICER -- Construction trucks could start rolling onto Lake Avenue South again the middle of next month if the weather cooperates, according to City Engineer Randy Sabart of Short Elliot Hendrickson Inc.
Sabart told the Spicer City Council on Tuesday that he has met with Chad Monson Excavating of Willmar to find out a "best projection" of when construction on the project could start again.
According to Tribune archives, Chad Monson Excavating halted construction to the $3.3 million road and utility reconstruction project in late November. The company failed to lay two coatings of blacktop on Lake Avenue South -- which is also Kandiyohi County Road 10 -- before closing construction for the winter.
The project will cost Spicer an estimated $1.54 million. It is part of a joint-powers agreement with Kandiyohi County. Spicer is financing $500,000 of its bill through a bonding option the City Council approved in November. The city has projected an early- to mid-summer completion date.
Also during Tuesday's meeting, the council decided to postpone action on a March 3 proposal from Northland Securities regarding the possible refunding of outstanding bonds from the state Highway 23 reconstruction project. The city is sitting on $1,770,000 worth of bonds, issued at an interest rate of 4.75 percent in 2003. According to a letter from city financial advisor David Drown of David Drown Associates, the bonds are not callable until February of next year, therefore disallowing simple refinancing and paying off the old bonds immediately.
According to Interim City Administrator Wayne Thompson, Northland Securities' proposal calls for the city to partake in "advance refunding" which would "lock-in" today's low interest rate. But ultimately, Thompson said, advance refunding could actually cost Spicer more money due to the professional fees and a loss of money gained due to interest rate changes.
"The potential for savings is actually greater," if the city waits until the February 2010 call date, Thompson said.
Based on Drown's letter, he recommended the city wait to refund the bonds until the call date. Drown indicated that locking in today's low interest rates may look good on paper, but in his past experiences, he's noticed that city's would save more if they waited for the bond call date.
With the information in hand, the Council decided to postpone further action about refunding the 2003 bonds until the February 2010 call date gets closer.