Vactor jetter removed from city of FL bond sale

Councilwoman Susan Young says she may need to rethink her vote

Jennifer Mevissen
Staff Writer

One local official isn’t so confident after her recent choice to go with the majority.

Forest Lake City Councilwoman Susan Young was the swing vote at Monday’s meeting against a resolution providing for the sale of $3 million in general obligation bonds. She supported fellow members Michael Freer and Jackie McNamara in their request to have $355,000 in equipment certificates removed, which would finance a capital purchase for the public works department of a sewer vac included in the 2012 budget.

“I may need to rethink my decision from last night,” Young said in an interview Tuesday morning.

The council voted 3-2 on March 12 to approve the sale of General Obligation Bonds, Series 2012A in the amount of $2,645,000. The city is issuing debt for the following purposes:

•$845,000 in general obligation sewer revenue bonds to finance a $591,483 lift station maintenance project, plus $234,000 in alternates structured with a 10-year term.

•$575,000 in general obligation equipment certificates to finance the purchase of a tractor and police squad cars structured with a 5-year term.

•$255,000 in general obligation water revenue bonds to finance the repair of the I-35 watermain structured with a 5-year term.

•$970,000 to refinance general obligation bonds to advance refund prior to the Feb. 1, 2014 call date of $1.945 million in series 2008A.

Finance Director Ellie Paulseth said the first three items were identified in the capital improvement plan this year as part of the annual budget process that begins each spring.

Because of the market lows with rates, she said it was a very good opportunity to tack on the emergency repair to the watermain under I-35 to the bond sale.

“It makes sense financially,” Paulseth said.

The proposals will be received at 10:30 a.m. on April 9 and the city council will consider them later at their regularly scheduled meeting. Northland Securities, Inc. will provide all services necessary to analyze, structure, offer for sale and close the transaction. Forest Lake’s general obligation debt is currently rated Aa2 by Moody’s Investors Service.

Council Weighs-In

Freer said his vote to take out the vactor jetter was a reflection of having to add the freeway watermain to the bonding. He noted the compromise would be to keep the tractor in the proposed sale.

Doing one and not the other doesn’t make a whole lot of sense, Young said. She said to be uncomfortable for paying to contract the service.

The new equipment would replace the sewer department’s existing 1999 unit which is inadequate.

“The truck we have right now is real marginal,” said Mike Tate, director of public works.

The justification outlined in the CIP for the purchase is several reasons; the technology is outdated after approximately 5-7 years, and more capacity is needed for deeper lift stations, stormwater ponds and catch basins.

“Productivity is the key,” Mayor Chris Johnson said.

Public works has to transport the material to the Met Council’s station, referred to as Pig’s Eye, in St. Paul.

In addition, the unit is used 200 hours or more per year. Renting the equipment is $450 per hour with operator for a potential total annually of $90,000. The current truck costs upwards of $5,000 a year to maintain.

“We’ll have increased operational costs,” Young said.

Fire Chief Gary Sigfrinius piped up, saying his department would use the sewer vac in a trench rescue.

Freer found support from McNarama who suggested the council stay within the parameters of what was discussed at the budget hearings last fall. Freer said he wanted the city to delay one of the capital equipment purchases for public works.

“Everything keeps getting put off another year,” Tate said. He warned that Forest Lake will be in a tough spot one day – when it really doesn’t pay to make repairs anymore.

Young said she has concerns the city is turning over equipment that has fairly low hours. However, the councilwoman said costs for machinery are predicted to be anywhere from 10 to 17 percent higher next year and in 2014. The costs are not going down, she said.

Moreover, Young said there’s a perception the Forest Lake City Council can’t compromise.

“We are going into budget season,” Young said, “and it was important for me to try and set a more collegial tone. I may have made a mistake,” she said of her vote.

The next regular council meeting is scheduled 7 p.m., Monday, March 26 at city hall, 220 N. Lake St.

In Other News

The council approved the plans and specifications for the I-35 watermain lining project and authorized staff to advertise for bids. Members are tentatively set to consider awarding a contract April 9.