Council

OKs sale of

bonds

Lowest interest

rate in years

By RON LARSEN

Journal Staff Writer

NEW ULM -- The New Ulm City Council Tuesday approved the sale of $2,470,700 in General Obligation Improvement and Refunding Bonds at 3.2614 percent, the lowest "true interest cost" in years.

A financial group including U.S. Bancorp Piper Jaffray, Inc. and Wells Fargo Brokerage Services, both of Minneapolis, and Citizens Bank of New Ulm and Valley Bank & Trust of New Ulm submitted the low bid.

The general obligation improvement bonds provided funds for 2002 utility, street and alley improvements, and approximately $680,000 of the sale amount goes for refinancing general obligation improvement bonds maturing in 2003, 2004 and 2005.

The city's bond sale consultant, Jon Burmeister of Public Financial Management's regional office in Des Moines, Iowa, told the council the low rate bid by the group allowed the city to refinance those bonds at three percentage points lower than the original sale rate.

Burmeister said Moody's Investors Service once again had given the city an A1 rating, the highest given to a city New Ulm's size and general economic strata.

"It's significant that Moody's believes the city's financial position will remain sound, given its proven conservative fiscal management strategies," Burmeister said. "In fiscal 2001, New Ulm achieved its sixth consecutive General Fund operating surplus."

That's a record that few other communities have achieved, Burmeister said, but "Moody's is watching with interest how the city handles the challenges brought about by the state's budget crisis."

The council approved a second change order to the 2002 utility, street and alley improvement, group 1, project, adding $26,260 in water end service replacement work on State Street between 8th and 10th North streets.

In other business, the council approved the appointment and compensation of election judges for the 2002 primary and general elections. Polling places also were designated, with all remaining the same as in previous elections except for Ward 2, Precinct 2. The polling place will be moved from the Senior Center to the first floor conference room in City Hall for both elections.