OLIVIA -- Renville County's board of commissioners awarded bonds on Tuesday to finance the construction of a new jail and offices to house the Health and Human Services and public health departments.
Together, the projects represent an estimated $9.7 million in construction, reported Bill Wells, county administrator.
The commissioners awarded $6.395 million in general obligation bonds to finance the jail portion of the project to Robert W. Baird Company, Milwaukee, Wis. The 20-year bonds carry a net interest rate of 4.09 percent. The company was one of seven offering bids.
The Renville County Housing and Redevelopment Authority/Economic Development Authority and commissioners also awarded over $1.7 million in lease-purchase bonds for the county social services and public health project. Northland Securities, North American Capital Inc., of Minneapolis, offered the awarded bid. The 20-year issue carries a net interest of 4.53 percent. There were two firms offering bids for this portion of the project.
The interest rates are lower than what was projected based on market conditions just one week ago, noted Wells. A favorable bond rating for the county certainly helped. Wells noted that Moody's Investors Services rated the county's general obligation bonds at AA2, and the lease purchase bonds at A3.
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Along with the bonds, the commissioners have earmarked over $1.5 million in reserve funds towards the cost of the construction projects.
The commissioners awarded the two projects on divided, three-to-two votes. Commissioners John Stahl of Olivia, Gale Dahlager of Sacred Heart, and Robert Novotny of Hector voted to award the bonds. Commissioners Paul Setzepfandt, Bird Island, and Bob Fox voted against awarding them.
Wells said the two commissioners voting against the bonds were pleased by the favorable interest rates, but remain opposed to the projects themselves.
The favorable interest rate offered on the jail project will allow the commissioners to fulfill their pledge to undertake the project without a net increase in the county's levy for debt service. The county is retiring bonds for previous projects with annual bond payments of $505,000 per year. The annual payments for the new jail bonds will average $475,000. The $30,000 difference will be applied towards the utility costs for the new jail.
Annual lease payments from the county's Health and Human Services department and public health will be applied towards the $130,000 in annual payments needed for the lease-purchase arrangement. Staff for the Health and Human Services department are now housed in two, separate buildings. The county leases space in the Renville County Hospital building and a house for the department. The annual lease payments are in the range of $88,000 to $90,000.
Project Architect Scott Fettig, of Klein McCarthy & Co., St. Louis Park, and Gary Otterstad, construction manager with Construction, Analysis and Management, Brainerd, are meeting today with county officials to develop finalized plans for the two projects. Wells noted that the final plans will be designed to accommodate the project's $9.7 million budget.
The preliminary plans call for building a separate jail at the site of the County Office Building in Olivia. It will encompass an estimated 27,000 square feet and offer cell space for 60 beds with double bunking.
It is not yet determined if the jail will include an enclosed walkway or connection to the existing law enforcement center, according to the county administrator.
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Plans for the Health and Human Services and public health offices have proposed 15,000 to 16,000 square feet of area. The preliminary plan is to attach the Health and Human Service offices to the south side of the Central Office Building. It was originally built with expectations for an expansion.
The county administrator said the county hopes to have bid specifications ready for the projects for a December 12 letting. The construction manager indicated that construction could begin in April, 2007 and would likely require 18 months to completion.
