North Branch Finds New Way To Fund Street Sweeper | New


The North Branch City Council had to get a little creative in figuring out a way to purchase a new street sweeper.

Earlier, at the April 13 board meeting, the board authorized staff to pursue the purchase of a new street sweeper, part of the funding coming from grants. Unfortunately, according to CFO Joseph Starks, the city has not received such grants, which means 100% of the money should come from the city.

In light of this, Starks came up with a payment method for the sweeper which, while being a unique method for the city, could ultimately increase the city’s purchasing power for future expenses, such as the planned purchase. a new snow plow / grader. The method presented by Starks is an interfund loan – essentially, the city lends money from one fund to another at a very low interest rate.

Starks told the council the loan would come from the sewer fund to the stormwater fund, plus any proceeds from the sale of the current street sweeper.

“The sewer fund is in better shape when it comes to cash / net position,” Starks said. “The loan resolution contains a repayment obligation clause to preserve the right to repay us with tax-exempt bonds. The upside is that the city wouldn’t do a small debt issue, unless we decided not to pursue a larger issue in early 2022. “

Starks said this method would save about $ 15,000 in bond issuance costs right now. It would also increase the city’s market value for the future, a larger bond, which would also potentially lead to lower interest rates on the potential future bond.

“This financing agreement allows us to buy the street sweeper now while preserving the right to save on bond issuance and interest charges in the event of a larger debt issuance next year.” , concluded Starks.

The term of the loan would be one year “or most likely less than that”, according to Starks. “It would not impact our ability to potentially lower sewer tariffs.”

Starks said interfund loans generally have to carry an interest rate, and based on calculations he assigned a rate of 1%. “The interfund actually acts as an investment for the sewer fund, and that is viewed favorably when you make these arrangements, which is why we attach an interest rate,” he added.

The total cost of the sweeper is $ 319,006.50.

“It’s very creative,” said Kathy Blomquist, Board member. “I don’t think we’ve done anything like this before.”

“I spoke to Shawn (Williams, city public works manager), and there should be a small town that might be interested in this street sweeper because there is still life and they don’t have not 107 miles of roads to go. go on, or 90 miles of tar, ”said Mayor Jim Swenson. “If we can do anything about that that would be great, if not you guys sweeping the street you shouldn’t have any excuses with two of them.”

Tips

In another action, the advice:

Approved on a 4-1 vote, with Swenson voting alone, to a formal travel policy for elected officials. As part of the policy, event, workshop, conference or mission related to possible travel expenses must be approved in advance by the city administrator and must include the estimated cost of travel. Approval will depend on such things as whether the distance traveled, in each direction, is more than 30 miles from the city limits, whether remote attendance is not an option and whether the city has sufficient funds, among other things. considerations. Previously, the city had no formal policy.

Received a financial update from Starks, as well as an update on the status of the “liquidation” of North Branch Water & Light (see city column on page 5 for more on NBW & L).

Approved a gambling license for the Church of Saint Gregory the Great for a raffle on December 5, 2021.


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