City bonds sold at low rate
By Ron Larsen Staff WriterNEW ULM - New Ulm's reputation for having sound debt management continues to let the city sell bonds at unusually low rates, the City Council learned Tuesday night.
Sale of $2,620,000 in General Obligation Permanent Improvement Revolving Fund bonds to help fund the city's 2009 Capital Improvement Project went to UMB Bank, n.a. of Kansas City, with a low bid of 2.9605 percent.
The sale of $1,689,999.75 in General Obligation Refunding Permanent Improvement Revolving Fund Bonds also went to UMB Bank with a low bid of 1.8433 percent.
"It's because it's a shorter term," Public Financial Management's Jon Burmeister said, in replying to questions from City Attorney Hugh Nierengarten and Councilor Ruth Ann Webster as to why the interest rate was so much lower on the revolving fund bonds.
The bonds that will help fund the city's CIP are for 10 years. The revolving fund bonds have a four-year duration.
While five financial institutions paired up into three bidding units for the CIP bonds, 11 financial firms paired up into five bidding units for a shot at the refunding bonds.
As Burmeister noted, the number of financial institutions bidding was a good indicator of the faith those institutions have in the way New Ulm is run.
Burmeister told the councilors that the city once again had an A1 bond rating. He quoted the rating as saying, "Moody's considers the city is extremely well run, their words. You can pat yourself on the back for that."
In other action, the council:
- Received the reports from the city and New Ulm Public Utilities Commission's auditors in regard to their 2008 audits which found very little to mention.
- Approved the request by Mark and Colette Zarling to permit amplified music after 10 p.m. on July 25, 2009 in their backyard at 326 Summit Ave.
Ron Larsen can be reached at rlarsen@nujournal.com
