Grand Marais city councilors addressed a variety of topics at their November 13 meeting, including an opportunity to reduce the debt service of a bond by approximately $143,000 over the next 11 years.
Council listened to a report from Chris Mickelson, a municipal advisor for Ehlers, the city’s financial advisor, who monitors the city’s existing debt and advises the city on financial topics, including opportunities to save money.
Mickelson, who appeared before the council on Skype, said Ehlers was proposing a bond refunding opportunity for the city’s business park bond.
The purpose of the proposed bond issue was the most cost-efficient means of achieving interest cost savings while also preserving the city’s future prepayment flexibility, he said.
Mickelson discussed a pre-sale report for the City of Grand Marais for the $1,145,000 General Obligation Improvement Refunding Bonds, Series 2019A. Those bonds were issued to refinance the city’s General Obligation Temporary Improvement Bonds 2007A, which were used to pay for various public improvements, including the construction of the street, curb, gutter, and utility improvements in the Cedar Grove Business Park.
Chris explained that because the city had assessed at least 20 percent of the project costs, the new bonds would be a general obligation without a referendum and will not count against the city’s debt limit.
The bonds Ehlers proposed would be issued for an 11-year term.
The debt service on those bonds would be paid by special assessments and ad valorem property taxes. Interest rates on the obligations proposed to be refunded are 3.75 percent to 4.7 percent.
The Net Present Value Benefit of the refunding is estimated to be $129,747, which is equal to 11.85 percent of the refunded principal.
Mickelson said because the city is expected to issue no more than $10 million in tax-exempt debt during the coming calendar year, the city will be able to designate the bonds as “bank qualified” obligations, which can result in a lower interest rate.
Under the agreement, Ehlers will solicit competitive bids for the purchase of the bonds from underwriters and banks.
The new bonds will not be pre-payable until February 1, 2026.
Council wasted little time deciding to go with Ehlers’ recommendation.
Councilor Kelly Swearingen, who seconded the motion, said, “A $143,000 tax savings to the public is nice.”
“Will it (the bond issue) take effect in time to affect our 2020 budget?” asked councilor Tim Kennedy, wondering if the council could lower the levy.
Mickelson wasn’t entirely sure, but would look into it and bring information to the council before the council sets the final levy for 2020.
Either way, said city administrator Mike Roth, by entering into agreement to have Ehlers issue the sale of $1,145,000 GO Improvement Refunding Bonds, it looks like it will be good news for city taxpayers.
The council will meet at 6:30 p.m. on December 11 to consider proposals for and awarding the sale of the bonds.
Code enforcement engagement results
Patrick Knight, the City’s Communications director, came before council with results of three different types of surveys the city used to find out what the public sees as common concerns associated with property conditions and behaviors in city settings.
The online survey gathered 524 responses, said Knight, adding the token board received 274 replies and the mailer survey accumulated 188 replies from the public.
Survey results indicate the community’s consistent concerns are the accumulation of trash and garbage, obstruction of public ways and obstruction of views, Knight said.
“Now that we have identified these concerns, what do they really mean to folks that make up the community?” Knight asked. He added the next step is to form focus groups and dig deeper into the information the surveys provided.
Knight said the survey information was reported to the planning commission and the data would undergo more scrutiny.
“Do you have any idea of how you are going to dig deeper?” councilor Swearingen asked.
The survey, said Knight, reflects a lot of different views on the survey questions, and he added that a focus group would be formed to review the material.
“How are you forming the focus group?” asked Councilor Anton Moody, who was filling in for Mayor Jay Arrowsmith DeCoux, who wasn’t at the meeting.
Knight responded by saying that anyone who was watching the meeting could contact him if they were interested in participating in a focus group.
Councilor Craig Schulte asked if the respondents to the questions and survey used by the city were from the city, and Knight said he didn’t know. Councilor Kennedy said he assumed people from outside the city gave their opinion on the surveys, and he appreciated those opinions.
Both noise and odors were also high on the list. City administrator Mike Roth said he assumed the odor comments were aimed at the city, and the PUC was working to correct the problem from the sewer plant.
Knight and city staff will now work on forming a focus group to look further into steps the city can take to improve city code and enforcement action—if that turns out to be what people want—and come back before the council with those results.
Housing Policy Implementation Plan Proposal
A plan to reduce housing regulatory barriers in the city is under way, and the city could have an updated ordinance in place by May 2020.
Roth told the council that the planning commission had discussed the Housing Policy Implementation Plan prepared by HKGi, who was tasked with finding a broader range of housing types that are desirable in the city.
HKGi is proposing a 3-phase project. The first is to “develop additional housing types and standards” for the city. The second is to “determine appropriate locations for each housing type” and the third is to “review and adopt zoning ordinance and map amendments.”
The first phase of the project is to include an online survey to enable community input on the proposed additional housing types early in the process.
Phase 2 includes illustrating the new housing types and densities on select vacant sites to help people visualize what future development of these housing types could fit into the existing community character.
Phase 2 also includes a public open house.
Swearingen said passing an ordinance by May seemed pretty fast, but added, “If we can have some avenues to open up our housing, I’m all for this.”
“We will be adding some more density,” said Roth, adding, “We need to make sure the community stays involved through that conversation.”
Kennedy, ever the realist, said the process might be slower than the council imagines. “Changes and the theory sound good,” he said, “But implementation, that’s when the rubber meets the road.”
When it came to vote, the council approved the $32,500 contract with HKGi to start working on the project right away so that the final Zoning Ordinance and Zoning Map amendments can be completed by the spring of 2020.
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