Herald Journal - Enterprise Dispatch - Delano Herald Journal
Montrose to refinance bonds for $118,316 interest savings
Oct. 19, 2009

By Ivan Raconteur
Staff Writer

MONTROSE, MN – The Montrose City Council authorized Paul Donna of Northland Securities to begin the process of refinancing some existing bonds, which could result in savings of $118,316 in interest charges.

During last Monday’s city council meeting, Donna explained the process of issuing $1,965,000 in general obligation refunding bonds.

The new bond would replace existing bonds that carry interest rates of 4.17 percent and 3.93 percent. Donna estimated that, based on current market conditions, the new bonds would be issued at an interest rate of 2.52 percent.

The estimated savings analysis assumes that the city can receive a credit rating of “A” from Standard and Poors, which Donna said is attainable.

Even if the city received a lower credit rating of “BBB,” the refinancing would result in a net savings of about $55,000. Issuing the bonds without a credit rating would result in savings of about $60,000, according to Donna.

The council authorized Donna to move forward with the process if it will result in a minimum savings of $100,000 to the city. The council will consider final approval of the refinancing during its Monday, Nov. 9 meeting.

Water supply plan approved

City Engineer Justin Kannas presented a water supply plan that the Department of Natural Resources (DNR) requires the city to implement.

The plan includes three major parts. The first is system design and evaluation, the second is emergency response procedures, and the third is water conservation planning.

The system design part of the plan addresses things such as well capacity, which must meet minimum requirements, even if the city’s largest well is out of service.

The city has a well capacity of 1,050 gallons per minute, and a firm well capacity (with the largest well out of service) of 650 gallons per minute, according to Kannas.

The average daily demand in Montrose is 203,200 gallons, and the maximum daily demand in 2008 was 511,000.

The city pumped approximately 80 million gallons of water in 2008.

The average residential water usage in Montrose is 68 gallons per person per day, compared to a Twin Cities average of 75 gallons per person per day, Kannas said.

The emergency response portion of the plan addresses issues such as online water system mapping, which allows operators to view a map of the city’s water system anywhere they have Internet access.

The city is also required to keep organized maintenance records, emergency contact information, and a contractor list of all the contractors who have worked on the city’s water system.

The city must also monitor well levels and report the results to the DNR.

The water conservation planning component of the plan requires the city to have a plan to reduce water usage.

It also addresses water that is not accounted for, which is water that is pumped from the city’s wells, but not accounted for in the distribution system.

About 6.8 percent of the water in Montrose is not accounted for, which is within the 10 percent maximum established by the DNR.

Conservation corridor grant application approved

Kannas presented information about a conservation grant opportunity that the city can apply for through the DNR.

This is a 90 percent grant, with a 10 percent city match.

Kannas said the money would be used to establish a 10 to 15-acre greenway corridor between the Malardi Wildlife Management Area and the Woodland Wildlife Management Area east of the city.

It would involve a 50-foot-wide corridor with the potential for a future trail.

The purpose of the grant is to protect fish and wildlife habitat.

City Administrator Barb Swanson said she has been looking for grants for this project for two years and has not found anything, so this would be a rare opportunity for the city, especially since this is a 90 percent grant.

Swanson said that the city recently met with about 12 representatives from the DNR, and they were very enthusiastic about the proposed project, and said the two wildlife management areas were among the most important in the area.

The council authorized Kannas to pursue the grant application at a cost not to exceed $4,000.

Odds and ends

In other business, the council:

• amended the city’s open burning ordinance to allow a Halloween bonfire sponsored by the city parks and recreation commission. The event will take place Saturday, Oct. 31 at Carver Field beginning at 6 p.m. Food and beverages will be available.

• approved a recommendation from the park and recreation commission to remove Doreen Outly from the commission due to lack of attendance. The council acknowledged Outly for her years of service on the commission.

• adopted a resolution providing for assessment of unpaid utilities.

• heard from Swanson that there are about 60 vacant homes in Montrose, or about 5 percent of the available housing, which is less than city staff had expected. These vacancies account for a loss of about $36,000 in annual revenue for the city, according to Swanson.

• acknowledged the volunteers who helped with plantings around the city signs.

• adopted a resolution of support advising MnDOT to study the possibility of passenger rail service along the Little Crow Transit Way corridor.


 

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