Council members voted unanimously at their meeting Monday, March 27, to finance an estimated $5 million worth of infrastructure upgrades to the Highview and Knowles substations (circa 1950) identified as a capital expenditure in 2023 using a general obligation promissory note with Bremer Bank.
Members weighed several factors in deciding to go the route of a promissory note including:
however the funds are borrowed, they will be paid back using revenues from the electric utility and not a tax levy; the utility can contribute up to $500,000 from reserves to reduce the overall cost of financing; general obligation debt cannot be issued with a repayment term longer than 10 years when being used for a utility without a referendum.
Ehlers representative Sean Lenz explained that with Bremer’s proposal, the city would be able to borrow the principal amount for an initial term of 10 years at an interest rate not to exceed 4% with the option to extend the note for another 10 years also at 4%. The proposal also allows the city, after the first three years into each term (2026 and 2036), to make prepayments or refinance at a more favorable interest rate if it's available.
“I do think this is, from the bank’s standpoint, a very aggressive proposal,” Lenz said.
The total cost with principal and interest is $6,673,080.
The council is expected to approve the issuance of the General Obligation Promissory note to Bremer Bank at their April 10 meeting and close on May 3.
Funds for the project will be available in May.
City Administrator Noah Wiedenfeld told council members as part of the city’s comprehensive effort to recruit and retain employees and promote continuing education, staff is proposing to pay firefighters a stipend to continue learning skills that will improve their leadership and performance on the job.
The proposal will implement a probationary program for 2023 that would pay firefighters a $500 stipend to successfully complete and receive certification for four specific continuing education programs: Firefighter II, Ropes Rescue-Operations Level, Fire Officer 1, and Emergency Services Instructor.
Firefighters who have completed these courses on or after Jan. 1, 2022 but prior to approval of this policy are eligible for a $200 stipend per course.
“This isn’t training that’s on Monday nights at the fire station. This would be going to a class, in some cases, at a technical college, it might be on the weekends,” Wiedenfeld said.
Currently firefighters take these classes on their own time and have to pay for such classes out of their own pocket.
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