Posted: 12/18/02

Strong city bond rating pays dividends

Jessica Foster
Staff Writer

An A1 bond rating from Moodyís Investors Service of New York City paid off for the city at Mondayís Forest Lake City Council meeting.

Ernie Clark and John Sander of Springsted, Inc., the cityís bond consulting firm, brought good news to the city. The low rating brought in bids from all over the country. Traditionally, Forest Lake has drawn bids from the midwest only. There were nine bids and 24 bidders, Clark reported.

The $5 million in bonds will be used to finance current and new downtown revitalization projects. The bonds are backed by proceeds from current TIF districts and tax increments netted from new commercial development in the city.

The bids are a result of the A1 rating, a jump from the traditional city rating of Baa2 in the former city or A2 in the former township.

ìThe whole is bigger than the sum of the parts,î Clark said.

The city approved selling the bids to U.S. Bancorp Piper Jaffray Inc., Wells Fargo Brokerage Services, Inc. and Morgan Keegan & Co., Inc. at a price of $4,967,450. The net interest cost is $1,422,072.92 with a true interest rate of 3.7287 percent.

The rate is better than what was expected and the city will save $75,000 in interest.

ìItís all just wonderful news and weíre very, very happy with what we received,î Sander said. ìItís better than what we even hoped for.î

On Dec. 16 the council also adopted the 2003 operating budget and property tax levy. The budget is set at $8,350,992 and the 2003 property tax levy is $3,730,226.

Park Budget

Park Coordinator Stacy Pearson came to the council with budget concerns.

For the second time this year, Pearson said the park budget is overdrawn.

ìOperating expenses have pushed us into the red again,î Pearson said. ìA couple of large items need to be paid for.î

She requested permission for $42,000 to be transferred from the parkland donations fund to pay for $22,000 worth of red lime which recently was installed at Kulencamp Park and $20,000 worth of hockey rink improvements.

Last year, the budget called for $18,000 in rink improvements. Pearson said she wants to replace the boards on the rinks with a plastic product which ìgoes together like Legos,î costs less than new wood boards and goes up in a day.

Administrator Chip Robinson stressed the park department needs to plan ahead.

ìThe park board needs to plan programs for the year and bring them to the council,î he said.

Mayor Ray Daninger agreed. ìWhat the council is looking for is some accountability of the budget process,î he said.

While the council approved paying for the red lime out of the parkland dedication fund, the approval is contingent on the completion of a detailed 2003 plan.

The council did not approve hockey rink improvements.

The parkland dedication fund has a balance of $448,136. The money comes from housing developers who must either dedicate land or cash to the city for parks.

Decorations

In October, the Forest Lake Chamber of Commerce wrote to the city to transfer the banner project and Christmas decorations to the cityís responsibility, citing funding concerns.

Park Coordinator Pearson came to the council Monday night suggesting the city join forces with Vision Profile Company to replace the banners with different designs for the next three years.

Vision Profile Company, Pearson said, would solicit businesses in the city to sponsor banners. The businesses would in effect be buying advertising space on the banners as 25 percent of the banner would include the business name and or logo.

Pearson said this would bring in at least $15,000 which would be used to purchase new Christmas decorations for the city and would not create a financial obligation to the city. In order for the program to work, at least 50 banners would need to be sponsored.

Ideally, Pearson, there would be 70 sponsored banners.

ìItís a win-win situation for everybody,î Pearson said. ìItís basically a fundraiser for the Chamber of Commerce that in the long run will help us.î

Councilman Terry Smith, however, questioned if the business logos hung up and down city streets would be a violation of the sign ordinance and said perhaps the city should budget for decorations.

ìThe bottom line is it is advertising for whatever business is on it,î Smith said.

Pearson said the blue banners which hung in the city during summer months have been thrown away. She added the red banners now up for the holidays are on their last season.

The council did not make a decision on the banners and tabled the decision to a future meeting.

Other business

In other business, the Forest Lake City Council Monday night:

ï appointed Judy Bull to the Forest Lake Economic Development Authority.

ï appointed John Moxness to the lead street worker position.

ï Scheduled the 2003 Board of Equalization meetingówhere property owners can come and challenge their assessmentsófor 5:30-7p.m. Monday, May 5.

Meetings

The Forest Lake City Council regularly meets at 6:30 p.m. the second and fourth Monday of each month in city council chambers. The next meeting, which will be the first for newly elected councilwoman Susan Young and Councilman Rick Ashbach, is set for Monday, January 13.

Top of Page