Bailey’s $3M plan gets cool reception
Blue Earth City Administrator Kathy Bailey unveiled a plan to accomplish a $3 million “wish list” at Monday’s City Council meeting.
But, the council members were a little overwhelmed and decided to move slowly as far as taking any action on the plan.
Mayor Rob Hammond called Bailey’s plan “way too aggressive for me.”
“I suggest we get a more concrete proposal and time to study it,” Hammond added.
Bailey says she would like to have the council continue to study the plan and possibly move forward with it in April.
“I agree it is on an aggressive timeline,” Bailey says. “But, I would like to see council action on it as soon as possible.”
The plan calls for the city to sell twocapital improvement project (CIP) bonds and an equipment purchase bond.
Plus, there is a provision for a new sidewalk improvement fund of $75,000 that would come out of the tax levy.
The largest items included in the $3,074,123 for projects which Bailey called a “wish list” came from the public works department.
Those totalled $841,000 and included a new building ($420,000), overlaying the tennis courts ($15,000 as the city’s share with the school picking up the other $15,000) and lights for the courts ($11,000).
Equipment purchases for that department include a used vac trailer ($42,000), snow blower ($40,000), road grader ($205,000) and plows ($35,000).
There is also work on the city hall building and parking lot included, as well as equipment for the police and fire departments.
Bailey says if the city would bond for these CIP items, the cost for the bond payments each year would be $88,320 annually for 10 years at an estimated 2.4 percent interest rate.
This would actually lower the amount by $200,000 which the city would need to have for a tax levy next year, Bailey says, from the current $1.124 million levy down to $886,000.
“Plus, this would give us an influx of cash,” Bailey says. “I believe we are going to hit a period later this year where we will be ‘cash hungry.’ It will come when our projects will cause a lot of cash flow out, and our cash in will not be available yet.”
Bailey also proposed refunding the current bonds on the swimming pool project, which are still at $1.6 million.
By refinancing those bonds, Bailey says the city could see savings of $131,930 which would start effective in 2015.
Councilman Rick Scholtes said he favored the refinancing of the pool bonds, and moving forward with the bond sales for last summer’s Galbraith and 12th street project, but wanted to wait on the rest.
“We could revisit this at our next meeting, I would think,” Scholtes said, and the rest of the council seemed to agree.
In other financial business, the City Council:
voted to proceed with having Springsted financial firm complete a CIP plan for the city at a cost of $9,000.
voted also to hire Pettipiece and Associates to complete a comprehensive plan for the city at a cost of $5,400. It would bring up to date the 1997 comprehensive plan for the city.
approved a 3-percent increase in the wastewater sewer rates for city residents for 2012.