Council

approves

funding

for capital

improvements

Bonding

consultant says city could be

more aggressive

By RON LARSEN

Journal Staff Writer

NEW ULM -- The New Ulm City Council approved the staff-recommended $2.5 million bond sale to finance the city's capital improvement projects for 2004 Tuesday night.

The council also approved the issuance of $1,005,000 in general obligation refunding bonds to "advance refund" $990,000 in general obligation improvement bonds, Series 1997. The sale of these bonds are contingent upon the city being able to clear at least $30,000 in interest savings as a result of the sale.

However, the council learned from its bonding consultant that it may have been acting too conservatively in the past by capping the city's bonded indebtedness.

"The impact isn't as great (on the city's indebtedness) because the city is paying off (an equivalent amount of debt) at the same time you're incurring new debt so debt isn't growing," explained Jon Burmeister of Public Financial Management, Des Moines, Iowa.

"Actually, your debt burden is dropping over time as the city's market value grows so you could actually be bonding for larger amounts to do some of those necessary things that are waiting to be done. You're the only city that I work with that is capable of doing that."

"If we bonded for $3.5 million, would that lower our bond rating (currently A1)," Councilor Clark Tuttle asked.

"Not substantially. It should stay at the A1 rating," Burmeister replied.

Staff was directed to set up a meeting, or meetings, to consider going to larger bond issues in the future.

The council ordered in 10 projects in its 2004 utility, street and alley improvements -- Group I and set a public hearing date of Tuesday, May 4 at 7 p.m. Two other Group I projects already had been approved.

Those projects will eat up much of the $2.5 million bond issue approved earlier in the meeting.

Group I projects include the Diocese of New Ulm's Oak Bluffs Fourth Addition development, work on North Highland Avenue, the airport access road relocation and gravel pit access road and the city's new industrial park development north of the airport.

Ordinances annexing 23.19 acres for establishing an industrial park on New Ulm's westside and designating a number of parcels as heritage preservation landmarks and establishing a South Broadway Historic District were approved by the council. An ordinance annexing a parcel in Milford Township received its first reading.

In other action, the council:

* Approved the final plat for Cottages at Orchard Hill and set the public hearing date for May 4 at 7 p.m.

* Granted Cottage Builders, Inc., variances for building four town homes in Orchard Hill First Addition, involving lot size, coverage, width, depth and frontage.

* Approved a Coalition of Greater Minnesota Cities resolution calling upon the governor and Legislature to restore cuts made in local government aid in past two years.

* Welcomed Lakeville City Council member Wendy Wulff who is pairing with Councilor Ruth Ann Webster in the League of Minnesota Cities' campaign to "walk in each other's shoes" during visits to each other's city.