The city of Brainerd will seek bonding for almost $17 million for various projects.
The Brainerd City Council Monday unanimously approved the issuance and sale of $11,245,000 in Electric Utility Revenue Bonds for upgrades to the city's electrical system, and, by a 5-2 vote, approved the sale and issuance of $5,850,000 in general obligation bonds for various street and utility projects.
Bruce Kimmel, of Springsted Inc., the city's financial consultant, said it was the first time the city had issued electric utility revenue bonds. The $11,245,000 bond issuance was approved by the Public Utilities Commission with the proceeds going toward upgrades to the city's electrical substations and distribution systems. The bonds are backed solely on revenues from the sale of electricity.
The proceeds from the general obligation bonds will go toward road and utility work for the new phase of the Industrial Park, the Wright Street extension, the Serene Pines/Dal-Mar project, Bluff Avenue utilities, Bluff Avenue reconstruction, the Washington Street storm sewer reconstruction, the Evergreen interceptor, Northwest Fourth Street storm sewer work, North Fourth Street reconstruction and the second phase of Oak Street reconstruction.
Voting against the $5,850,000 bond issuance were council members Bob Olson and Kevin Goedker. Olson said he would prefer the council pulled the Industrial Park project from the bond issuance because, with all the projects, the city's debt service would increase 65-70 percent in 2008.
Olson said the city doesn't have enough reserve funds to pay the debt service if the lots in the addition to the industrial park are not sold.
"I can't support this bond sale based on the future tax burden I feel it's going to put on our taxpayers," Olson said.
Council member Mark O'Day said he supported the bond issuance, including the industrial park project, because the land would not be any benefit to the city if it wasn't improved with roads and utilities.
Instead of reducing the bond amount by eliminating the industrial park project, O'Day said he hoped that the project bids would come back less than estimated, as they have for other projects.
In other action, the council:
Approved a long-term use agreement with the city of Baxter for the city's wastewater treatment facility and the facility's 2009 expansion. Also directed staffers to monitor possible challenges to the permit for the wastewater treatment facility expansion.
Appointed Olson to the Downtown Advisory Committee.
Was informed by City Administrator Dan Vogt that Wausau Paper had informed the city that it was looking into the cause of several noise complaints received by neighbors of the paper mill. Wausau had informed the city that one cause may be steam relief valves. Vogt said Wausau planned to take corrective action on the noise.
Was informed by Vogt and Olson that during a recent meeting with Minnesota Teen Challenge officials, the group was very interested in locating to the Brainerd Regional Human Services Center campus and considers Brainerd its number one priority.
Was informed by Vogt that with the start of the budget process, he is advising department heads that the budget, including tax rate, would be "status quo" for 2008. "I do want to caution the council on the fact we're not going to have any extra money," Vogt said.
Accepted the resignation of Assistant City Engineer Don Klein, who has taken a public works director position with another city.
MATT ERICKSON may be reached at email@example.com or 855-5857.
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