Cambridge saves $387K in refunding of obligation bonds
By Rachel Kytonen
When the Cambridge City Council decided to call for the sale of $4,065,000 in general obligation bonds in early May, they were hoping for good results. And that’s exactly what they got.
During the Cambridge City Council meeting Monday, June 6, Carolyn Drude with Ehlers reported the results from the June 6 general obligation bond sale.
After discussion, the council awarded the bid to United Bankers’ Bank in Bloomington and Community Pride Bank in Isanti, who submitted the bid together. The banks gave the bonds a true interest rate of 1.6594 percent.
The city received nine bids for the bond sale, with a low true interest rate of 1.6594 percent to a high true interest rate of 2.0141 percent.
As a result of the winning bid, the city will see a future value savings of $387,828. When the city called for bids in April, city staff projected the city would see a savings of approximately $300,000.
Drude said she was pleased with the results of the bidding process, and said the city of Cambridge continues to have a AA- bond rating as rated by Standard and Poor’s.
“Having 87 percent of your debt paid off in 10 years is really significant to the city’s bond rating,” Drude noted.
Cambridge Mayor Marlys Palmer was excited with the bond sale report.
“I can recall when the city didn’t even having a bond rating, so I can’t tell you how thrilled I am for the citizens,” Palmer said.
Director of Finance Caroline Moe said the real benefit will be the Cambridge taxpayers.
“When we go to update our long range plan, these are savings we can pass onto our taxpayers, and that’s what is real exciting for me,” Moe said.
Palmer gave much credit to Drude, Moe, City Administrator Lynda Woulfe and other city staff who were involved with the project.
The $4,065,000 in general obligation bonds was issued to finance the COPAR street improvement project; and refunding general obligation water and sewer revenue bonds dated June 2001; general obligation improvement bonds dated July 2004 and general obligation bonds dated May 2006.
The COPAR street improvement portion of the $4,065,000 bond sale is $610,000 and the refunding portion of the bonds is $3,455,000. The maturity schedule begins in 2012 and will be completed in 2021.
South Alabama Street Project
After a lengthy discussion, by a 3-2 vote with Palmer and Councilor Chris Caulk voting against, the council approved accepting a proposal from SEH to provide engineering services for the South Alabama Street Survey and Right of Way/Stormwater Review.
SEH will provide the services for a maximum cost of $28,5000, and will bill the city on an hourly basis for the work. City Engineer Todd Blank from SEH said the services are needed as the city prepares for the proposed reconstruction street of South Alabama Street in 2015.
Palmer voted against the motion because she wanted more information on actual traffic counts and accident reports in the area.
Caulk voted against the motion because he felt it wasn’t the right time to do the project, and said the road is just fine.
Councilor Bob Shogren voiced opinions in favor of the project in part to capture the $1 million in federal funding that has been awarded to the project, but also because he feels the street does need improvements and feels it’s a dangerous road.
Blank explained to proceed with project planning and to conduct meetings with the adjacent property owners, Cambridge Township and the Lake Fannie Association, engineering services must be performed.
The services will consist of surveying the area to determine existing Right of Way and property locations and also to obtain topographic and elevation information required for project design and preparation of construction plans.
Also included will be a review of stormwater runoff requirements and defining options to treat the runoff.