OLIVIA — State funding continues to fall short of meeting road maintenance needs in Renville County, leading the county to return to the bond market to finance road projects.

The Renville County Board of Commissioners at their meeting on Tuesday awarded a $13.84 million bond for road maintenance projects.

The commissioners awarded the low bid of Robert Baird for the 20-year bond. It has a true interest cost of 1.863 percent. The issuance attracted one other bid. FHN Financial Capital offered a bid with a true interest cost of 2.065 percent.

The awarded bid comes at a slightly higher cost than was estimated by the county’s financial consultant for the issuance, PFM Financial Advisors LLC, of Minneapolis.

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“It is still a great interest rate,” Arcelia Detert, senior management consultant with the company, told the commissioners, adding: “1.89 for a 20-year bond is quite unheard of.”

The county went into the market retaining its AA2 bond rating. Financial analysts do not see any pressure on the county’s credit related to COVID-19, and the county’s financials are very strong, Detert said.

The county’s bond issue went to market at a time when interest rates are inching upwards, according to Detert and Chuck Upcraft, a senior management consultant with PFM Financial Advisors. It’s a matter of supply and demand, they said. There are a lot of issuers in the market right now prior to the election and end of year.

There were seven Minnesota issues on the market on Tuesday, with three of the sales occurring at the same time as the Renville County issue. That level of activity likely explains why only two bids were received, they said.

“I think you still got a very attractive bid given the market conditions today,” said Upcraft.

The commissioners called for the bond sale in September with intentions of using the funding for road projects slated in 2021 and 2022, and one in 2023. The funds are expected to be used for work on portions of County Roads 2, 3, 8 and 21 — all are County State Aid Highways eligible for state funds distributed by a statutory formula.

In calling for the bond last month, the commissioners noted in their resolution that road needs are not being met at current state aid funding levels. The county receives $6.3 million a year in state aid for road construction and maintenance. It also receives $300,000 in federal road aid and levies a local wheelage tax generating $190,000 annually.