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Interest rates lower than county board expected
June 28, 2019

BY GABE LICHT
Editor

BUFFALO, MN – Despite Wright County’s bond rating being decreased to AA, the interest rate on a nontaxable certificate of participation for the government center came in lower than expected, at 2.95 percent, the board learned Tuesday.

“To break 3 percent, we didn’t think was likely,” said Chris Mickelson, a financial specialist with Ehlers. “It was possible due to the market’s demand for municipal bonds and certificates, the strong bond rating of the county, and investors and the rating agency seeing the purpose of this facility and the law enforcement training facility.”

Wells Fargo was the low bidder and paid a reoffering premium of nearly $4 million, allowing the county to buy down the amount of the certificate to $50,085,000.

Ehlers and the commissioners had expected an interest rate of at least 3.1 percent, which would have cost the county about $2.5 million more in interest over the life of the certificate.

Mickelson said the cost of the certificate of participation with an AA bond rating was similar to what a general obligation bond would have been with a AA+ rating.

Overall, the certificate will cost the county $80,748,320, though it will be callable Dec. 1, 2029, at which point the county could refinance it to realize savings.

The interest rate for the $6 million taxable certificate of participation for the tactical training facility will be even lower, at 2.53 percent.

Wells Fargo was the lowest bidder for that certificate, as well, but did not offer a premium for the certificate. However, there was an underwriter’s discount that brought the amount down to $5,885,335.

The certificate will be callable Dec. 1, 2026.

EAW reversal
At the June 18 meeting, the board had voted 3-1, with Commissioner Charlie Borrell opposed and Commissioner Mike Potter absent, to direct staff to draft findings to require an Environmental Assessment Worksheet for an asphalt plant in Silver Creek Township.

“Because we were missing Mike that time, I’m going to make a motion that we do not approve this today, and draft findings for a resolution not requiring an EAW,” Borrell said.

After Potter quickly seconded the motion, Commissioner Mark Daleiden shared his thoughts.

“I actually spent some time this last weekend, going over to the area and pulling up the EAW from the website,” Daleiden said. “ . . . I think there are a number of questions on that EAW that are easy to answer that aren’t going to serve much purpose for those residents over there. The MPCA (Minnesota Pollution Control Agency) has pulled concerns regarding asphalt plants . . . From what I can see, I don’t think this is necessary.”

“I’m saddened to see the number of staff time going into this,” Chair Darek Vetsch said. “We spent that time going one direction, just to come back and go the other direction. There were three weeks that were open to ask questions.”

Staff findings will return to the board during its Tuesday, July 2, meeting for final action.

Homelessnes prevention grant
Jennifer Swick, of Lutheran Social Services, went before the board to ask it to approve a resolution authorizing the application for the Minnesota Housing and Finance Agency Family Homelessness Prevention and Assistance Program.

“We’re not asking for money,” Swick said. “I want to make that known right off the bat.”

The grant would provide $380,000 over two years to Wright, Stearns, Sherburne, and Benton counties to help secure housing for those who are homeless or on the verge of homelessness.

“It would be interesting to see how many people are being served in Wright County,” Daleiden said.

Swick said she did not know, but could find out and follow up with the board.

She did say slightly more than 100 households throughout the four-county region were served in the first year of the current biennium.

Of those being served, 37 percent were homeless, 33 percent were doubled up with another household, and 30 percent were trying to prevent homelessness.

She explained there is a tiered level of assistance, with self-sufficiency the ultimate goal.

When asked by Vetsch, Swick said the grant allows no more than 13 percent to be spent on administration.

Potter asked if the formula for the grant was based on population, need, or something else.

“What are the metrics of what we’re getting for our dollar?” Potter asked.

“I don’t know how they direct the funds,” Swick said.

Vetsch asked if Wright County Community Action could apply for the same grant.

That would be a possibility, but it is too late to do so for the current biennium.

Borrell voted against the resolution, and Potter threatened to do so in the future.

“If this comes back and we don’t get our questions answered, it will be a ‘no,’” Potter said. “I need to know the breakdown to Wright County, how it works, and all the little metrics to make sure the citizens of Wright County aren’t getting nothing for what we’re paying out for.”

Transit support resolution
On a 4-1 vote, with Borrell opposed, the board approved a resolution of support for public transit and cooperative partnerships.

The resolution references the partnership between Wright, Sibley, and McLeod counties to operate Trailblazer Transit. The Minnesota Department of Transportation Office of Transit and Active Transportation partners with the Trailblazer Joint Powers Board to provide oversight, technical support, and the majority of funding for the transit system.

Borrell opposed the final paragraph of the resolution. It states:

“Now, therefore be it resolved that Wright County hereby proclaims its support for public transit, commits to Wright County’s partnership with Sibley County and McLeod County, and hereby pledges to appoint board members to the transit governing board who support public transit and will dedicate themselves to work in a positive, professional, and cooperative manner to promote public transit and the mission to expand public transit service to meet at least 90 percent of the demand throughout the entire designated service area by the year 2025 based on the availability of funding.”

“Why can’t someone be against something?” Borrell asked. “You’re basically telling them, ‘You’re going to toe the line.’ You’ll say, ‘Jump,’ and they’ll say, ‘How high?’”

“We want people on this who want to be good partners and not just self-centric,” Vetsch said.

He offered to remove the verbiage about expanding transit if Borrell would vote for it, but that was not the only aspect of the resolution Borrell disagreed with.

“I don’t know how you can call yourself a conservative and support this,” Borrell said. “It’s such a waste of taxpayer money. I don’t think we should be doing it.”

“I’m doing my fiduciary duty to the county be getting the maximization of resources for the money,” Vetsch said. “If I don’t believe in public transit, I talk to the legislators and get them to defund it. You don’t defund things from this level by rejecting grants.”

Odds and ends
In other business, the board:

• approved the revised financial policies and procedures, including an amendment to the personnel policy regarding business-related expense reimbursements.

• approved proceeding with Hallber Engineering for commissioning services for the judicial center and a change order of about $20,000 for electrical changes related to courtroom audio/video systems.

• approved an agreement with the City of Delano for the reconstruction of a portion of Wright County Road 30. The city is leading engineering of the road, with work scheduled for 2020.

• approved increasing the per diem rate at the jail to $57.50 per day per inmate, a $2.50 increase, and requiring reimbursement to the county for train tickets purchased for Minnesota Department of Corrections inmates released from the jail, in the amount of $47.

• scheduled a committee of the whole for 1 p.m. Tuesday, July 16, to discuss raising the age for purchasing tobacco to 21.

• set times and dates for coffee with the commissioners related to the Safe Families and Connected Kids initiatives for 1:30-2:30 p.m. Tuesday, July 23, and 9:30-10:30 a.m. Thursday, Aug. 8.

• approved a jurisdictional change agreement with the City of Buffalo regarding Calder Avenue, which is also currently known as Wright County Road 134.

• appointed Richard Ward as emergency management deputy director following the promotion of Seth Hansen to emergency management director.

• approved the redirection of funds from the judicial district to the county for The Turn, and adult drug court program. The county received a $500,000 grant for the program, which includes about $130,000 per year for participants facing housing issues.

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