Grand Marais city councilors were joined by members of the Public Utilities Commission June 27 to hear a proposal from their bond counsel regarding refunding of a $1,965,000 electric system revenue bond.
And it was an easy decision.
Bruce Kimmel of Ehlers and Associates said five bids were received, and he was pleasantly surprised by the results. Whereas he was expecting the savings to be in the range of $130,000 (to refund the 2012-2023 maturities of the $2,885,000 Series 2003 bonds), the actual savings will be closer to $200,000. After all costs, said Kimmel, that means the city will see about an 8.5 percent savings. “As you can see, we did much better than we believed at first,” said the financial consultant.
Kimmel also commended the city’s administrators for achieving and maintaining an “A” rating from Standard & Poor’s, which views the city’s electric utility risk profile to be relatively strong, at 3 on a scale of 1-10, with 1 being the least risk. “The ratings speak well to the management of the system and the future incurment of debt,” he said.
Councilor and PUC member Tim Kennedy said the decision to go ahead with the refunding was a simple one. “We expected this would be a benefit, but this is pretty significant to the PUC and its customers,” he observed. By unanimous vote, the council (Kennedy, Bob Spry, Bill Lenz, Jan Sivertson and Mayor Larry Carlson) and PUC (Kennedy, Adam Harju and Karl Hansen) voted for a sale resolution allowing refunding of the bonds with an expected closing date of July 25.
Zip line grant
Next, Matt Geretschlaeger appeared before council to ask that the city apply to the IRRRB for a $300,000 Public Works Grant to pay for infrastructure to the Gunflint Trail site of his proposed Superior Zip Line project.
The request triggered some haggling over wording of a draft letter and resolution Geretschlaeger presented and the propriety of the city becoming further involved with the project.
Geretschlaeger explained that the grant application is actually a twostep process, and further details such as price breakdowns will be provided in the final request, which will be presented to council at a future meeting. All he wanted now, Geretschlaeger said, was permission to be the recipient of a grant based on information to be presented in two weeks.
Furthermore, he said, the grant has a limit of $300,000. “It’s very simple…you prove the cost, and that’s all you get.” Geretschlaeger went on to explain that the IRRRB grant under discussion was designed “just for this purpose” and is “extremely common to run infrastructure.” He also pointed out that the zip line is a $1 million-plus project that will bring jobs and an additional recreational attraction to the city, and one in which he has personally made a large financial investment. “I’m not here to say I’m gonna do this with smoke and mirrors. That’s not the case here…I’m all in.” City Administrator Mike Roth assured council that the grant, if approved, was only pass-through money, and none of the city’s money would be involved. He agreed with Geretschlaeger that public works grants are common for projects such as assisted living facilities, which the city was considering last year.
Councilor Tim Kennedy said he was not willing to approve an openended resolution without the details but believed it was appropriate for the city to help procure the grant, especially since it will benefit economic development. However, he said, Geretschlaeger needs to be aware that more details are necessary before he can give it his full support.
Council voted 4-1 to authorize the application to the IRRRB, with Jan Sivertson casting the lone no vote. Sivertson said she has already received some “bad reports” about the city’s involvement in the zip line project, especially since the city sold the land to the developer.
“I feel that since we sold the land, we’ve done our part. This (grant application) just puts us in a further position with this project,” she said.
Other business:
. At the request of City Administrator Mike Roth, council set a tentative date of Aug. 10 for a work session to begin discussions about next year’s budget. The session will take at least half of a day, said Roth.
. Council received a letter from Homestead Cooperative asking the city to take care of two frost boils on the upper section of 11th Avenue West in preparation for planned blacktopping work that will be paid for by the residents. The residents did not know if the private contractor’s estimate included treatment of the boils, and Roth said he would look into it and if necessary, contact the city’s engineer.
However, council also authorized Roth to put out an RFP for a new city engineer, as the most recent firm (SEH) is involved with litigation against the EDA and Roth said he is not comfortable working with them.
. Roth reported that there was no permanent damage done to the library as a result of water seeping through a wall joint on the north side of the building during the June 20 storm. People have been looking at the problem but are not yet sure how to fix it, he said. The water leak caused the library to close for two days.
. Council held a closed session with Attorney Chris Hood to discuss ongoing litigation against Burbach Aquatics involving the city’s swimming pool.
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