City has a $90k headache

Temporary bond renewal will cost city; council green lights one-year ambulance contract

By Per Peterson

The Tracy City Council on Monday got some bad news to the tune of $90,000.

As part of his report, Tracy City Administrator Erik Hansen informed the council that the City will have to pay $90,000 to re-issue a 2019 temporary bond for the ongoing street project. That temporary bond was due to be replaced by a long-term bond from Rural Development.

Hansen said he received an email earlier Monday from Ehlers, the City’s financial advisor, informing him that the three-year bond has to be re-issued.

“According to state law in Minnesota, you can only issue a temporary bond for three years,” Hansen said at Monday’s meeting. “Essentially what it means is, because the project isn’t complete, we have to issue another temporary bond to refund the previous one. It’s going to cost us $90,000. We’re stuck; there’s literally no other way to do it.”

Hansen said it’s still not clear how the City will pay for the bond re-issuance, but it might come out of the street project itself, although it’s unclear what kind of impact that move would have on other projects like the pond decommissioning and Center St.

“We’re trying to figure this all out in terms of making sure we have enough money for it,” said Hansen. “It’s not a good piece of  information, but we will figure out how to make it work. This all happened before we got here.”

When asked if the City is on schedule to have the project completed within the next three-year window, Hansen said it is. He expects the Center St. project to get bid in April, with construction beginning this summer, so the project can be completed in time to meet Rural Development’s deadline of June 2023.

“We’ve got to start the project this year in order to make that happen, because if we wait to bid this project until later in the year or next year, it’s going to cost us a whole bunch more money because everything’s going up these days,” Hansen said. “We’re pushing really hard to make that happen; we’ve been slowed down by Rural Development, but now that they’ve had some personnel changes and they’ve approved the pond (decommissioning), we’re going to push this through.”

See this week’s Headlight Herald for more on this article.