NEW RICHMOND -- City Council members held their monthly work session virtually Monday night, March 22. Here is what you need to know:
Refinancing will mean savings
Assistant City Administrator and Finance Director Rae Ann Ailts walked council members through a proposal which would install the city as the manager of New Richmond Golf Club’s finances, allowing the club to restructure existing debt of $910,000. That debt consists of a $400,000 loan to a private lender and a $500,000 bank loan currently guaranteed by the city.
The move would promote more transparency of the club’s financial management and invite more hands-on involvement between the city, the club’s management and its board.
Refinancing of the $500,000 is expected to save the club up to $35,000 in interest expense.
The council voted unanimously to enter into an agreement to restructure the club’s debt contingent upon changes to the lease agreement including regular financial review and attendance at meetings by city representatives being approved by the Golf Club’s Board of Directors.
2. Social Justice Advisory to explore addition to city slogan
The council approved a joint effort between city staff and members of the Social Justice Advisory Group to explore the possibility of adding a subheading to the existing city slogan: The City Beautiful.
The intention would be to reflect the values of the community by adding verbiage that might speak more directly to families and companies considering a move to New Richmond. The additional words would make clear what the city stands for.
The mission of the Friday Memorial Library Social Justice Advisory Group is to engage community members through education and conversations about diversity, equity, and inclusion. By using the power of stories, the group aims to broaden perspectives, defuse fears, and build trust so that our community provides a strong, vibrant, and welcoming space for current and future generations.
3. Pandemic surplus going to debt reduction
Cost containment strategies implemented by the city to counter the COVID-19 pandemic’s impacts in 2020 resulted in a surplus of $882,903. The city is required to carry forward $312,782 of those funds. The city previously committed $386,667 of those funds to capital projects slated for 2021 leaving a balance of $183,454.
Last week, the council voted to use that remaining surplus to pay cash for a portion of the 2021 capital projects thereby reducing the amount of debt needed to be issued to $1,692,244. Based upon a 15-year amortization and interest rate of 2.5%, the estimated interest savings over the life of the debt would be $81,200.
Council members made their decision knowing that the city expects to receive approximately $930,000 in federal funds through the American Recovery Act within 60 days of the state receiving the funds.