At the recommendation of the city’s accounting consultant, Ehlers and Associates, the Public Utilities Commission (PUC) has been considering refinancing bonds to take advantage of low interest rates and save up to $67,000 in interest.
An original bond for $1,000,000 was sold in 2000 to pay for a big sewer project and refinanced in 2005 because of better interest rates. If the bond were not refinanced, a payment of $655,000 would be due in 2012.
The city could pay off the current bond with money from its reserves, however. The city has reserves in all three PUC funds – water, sewer, and electric.
Commissioner Tim Kennedy said paying off the bond seemed like a better idea than continuing to pay interest even if the new bond rate is low. Administrator Mike Roth wondered if they might be sorry five years down the road if they had dipped into reserves but needed money for a big project and the interest rates were no longer low. Kennedy responded, “It’s better to save today than to think we might be able to save in five years.”
On November 2, 2011, the PUC – with the go-ahead from the city council – voted to pay off the bond rather than refinance it, saving even more money — $150,000 – in interest.
“It’s a good move,” said PUC Chair Hal Greenwood.
“I think we should use some of that money for bonuses for the employees!” said Water/Wastewater Superintendent Tom Nelson.
“No—for the commissioners!” laughed Greenwood.
No rate increases for next year
The PUC followed suit with its energy provider, Southern Minnesota Municipal Power Agency (SMMPA) and decided not to increase electric rates in 2012. Commissioners will not be increasing sewer or water rates, either. The proposed budget includes small wage increases and sets aside some funds for capital projects and debt service.
Residents pay for utility service by how much they use (which shows up on their utility bills) and how much their property is worth (through property taxes).
“I think you should feel really good about what you’ve been doing here,” Roth said. Greenwood commended Roth for his part in keeping costs down. DuChien retires
After 35 years with the department, Steve DuChien has retired.
Tom Nelson recommended that they try to get along without filling his position over the winter. One thing that might suffer is customer service, Tom said, something DuChien put extra effort into.
The department is planning to host a retirement party for DuChien on an as-yet-undetermined date. Those at the November 2 PUC meeting spoke highly of him.
Christmas decorations
“You may have noticed we’ve been putting up Christmas decorations,” Electric Superintendent Mike Taylor told the PUC board. “All told, it takes about a week of our time. I think it’s a pretty good gift from the PUC to the community.”
Perhaps we could all say a little thankyou to the people who do things like that to make the community a brighter place.
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