Investment advisor Bruce Kimmel of Ehlers Inc. of Roseville had good news for county commissioners on October 25, 2011. The county was going to get very good rates on the issuance of two sets of bonds, one which would refinance bonds issued in 2003 for construction of the Law Enforcement Center and the courthouse addition ($1.41 million) and the other which would fund projects to be paid for through the 1 Percent Recreation and Infrastructure Sales Tax ($8.57 million).
“We received very good bond bids on the county’s behalf today,” Kimmel reported.
Four bids were received for the first set, and it was won by UMB Bank of Kansas City, Missouri at 1.1987 percent. Ehlers had projected that the bonds would be sold at a 1.5 percent interest rate. The lower rate would increase net savings by over $137,600 and decrease the bond period by a year. This was actually a refinancing of bonds that had already been refinanced in 2003, but the county would be seeing a savings of over 7 percent, more than twice the threshold Ehlers recommends for refinancing, Kimmel said. It was a “great result,” he said. These bonds will mature in 2016.
They had done well when they refinanced the bonds in 2003, Auditor-Treasurer Braidy Powers said. “I never thought we’d be doing it again,” he said.
Two bids were received for the second set of bonds, won by Baird, an underwriter representing at least 15 other firms that would take part in the investment. The rate was 3.14 percent, .3 percent lower than expected. The debt service on this set of bonds will be just under $586,000 per year, which shouldn’t be a problem, according to Powers, because the 1 percent tax is coming in at the rate of about $1 million a year. These bonds will mature in 2032. Powers called the interest rate “fantastic.”
Moody’s credit rating
Kimmel told the board that Moody’s had upgraded the county’s credit rating as well. It had been considered at an “investment grade” already, but on the low side.
Cook County now has an A1 rating. “It definitely helped you in today’s market,” Kimmel said. He said he and his colleague Carolyn Drude believed the rating should have been even higher. “They were very pleased with your fund balances and your very healthy reserves,” he said of Moody’s rating. They also liked the county’s limited exposure to state aid and the fact that the county’s unemployment level was lower than state and national medians.
Downfalls for the rating were the fact that the county receives a lot of federal funding and its economy relies on tourism, Kimmel said, although Cook County’s tourism economy is “fairly recession-proof.” In other news:
“In the areas you can control,” Kimmel said, “you scored off the chart.”
Kimmel presented the board with a congratulatory plaque that says, “Moody’s Investors’ Service Credit Rating ‘A1.'”
. The board passed a resolution approving a grant agreement between the county and Arrowhead Electric Cooperative Inc. (AECI). AECI will receive $4,000,000 from Cook County 1% Recreation and Infrastructure Tax revenue for construction of fiber optic broadband infrastructure that will reach everyone currently served by AECI or Grand Marais Public Utilities.
AECI received a USDA Rural Utility Service grant under the American Recovery and Reinvestment Act in the amount of $16,137,485. AECI’s contribution to the project will be $600,000.
The network will be able to deliver television, phone, and Internet services. The estimated date of completion is December 31, 2012.
. The board passed a motion approving 1 percent funding to pay up to $250,000 for clubhouse roof repairs ($11,960) and maintenance equipment replacement (initially bid at $182,171.27 by MTI Distributing of Brooklyn Center, Minnesota) at Superior National at Lutsen Golf Course.
The motion was contingent on EDA legal counsel confirming that the EDA could legally purchase the equipment from MTI. The EDA needed clarification on whether sealed bids were required and whether MTI would need to be or was a business qualified for purchases by state-associated entities. The motion also included the option of the county purchasing the equipment on behalf of the EDA if necessary through its state purchasing system.
. The board approved a $44,500 transfer of funds to North Shore Hospital for a hematology analyzer. The money, collectedwhenthehospitalhada1percenttax,isnowin county hands.
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