Prescott approves issuance of $1.37 million bond
Passing of a resolution for a general obligation street improvement bond, potential changes with Firehall Field, and awarding of bids for the Albert and College streets project were main topics at the June 11 Prescott City Council meeting.
Issuance of bond
The council passed a "resolution providing for the issuance, sale and delivery of $1,370,000 general obligation street improvement bonds."
City Finance Director / Treasurer Vanessa Norby said the city was going to finance for a portion of the new fire truck through the bond.
"The city's estimated portion for the fire truck is $372,000," Norby said. "Originally we were going to pay $100,000 out of reserves and borrow the remaining $272,000 over 10 years with the bond."
But Norby said the city decided against this in order to save money and prevent an increase in the levy.
"The bond payment on just the truck was going to cost around $35,000 per year with principal and interest that the city would need to increase the levy in order to repay," Norby said. "We looked closer at our financial situation in the general fund and determined we can comfortably pay the entire amount using reserve funds in 2019. Doing so will save the city thousands per year in interest and debt issuance costs and relieve the burden of increasing the levy to make the fire truck payment."
Prior to being able to issue a bond, Norby said the city had to get an updated rating from Moody's, which provides credit ratings and research covering debt instruments and securities. The city received a AA3 rating which it has had for several years. Norby said the rating helps determine the interest rate the city can receive on its bond. The AA3 rating is a "favorable rating," but Norby would like the city's rating to increase.
"Some of the factors that could lead to the city increasing its rating in the future include substantial expansion of the city's tax base, continuing financial improvement in TIF number 4 and number 5 with reduced reliance on the general fund, and the reduction of the city's tax burden. The city itself will be at a little over 2.5 percent of its 5 percent full debt limit, but is expected to decrease that a lot in the next few years."
Norby said part of the city's rating is out of Prescott's control.
"However, the city is also impacted by overlapping debt of Pierce County and the Prescott School District which was noted as 'very high at 7.8 percent of full value, mainly due to the school district borrowing for the new high school.' This is out of the council's hands," she said.
While Prescott will receive a grant to cover part of the Albert and College streets improvement project costs, the city will still take out the original amount planned for the bond.
"[T]he city decided not to reduce the size of the bond by the amount of the grant," Norby said. "This will allow the city to do some mill and overlay on other city streets in need of attention."
Norby said Prescott City Council and staff have worked hard to lessen the amount of borrowing the city needs to do.
"I would just like to add, due to careful capital planning by the city council and staff, the city has been diligent to only issue bonds every few years," Norby said. "The last bond was issued in 2015. The staff has also worked very hard to determine a good balance between use of reserve funds and debt issuance, saving the city thousands of dollars by not borrowing for the entire project."
Albert/College Street project bid
Russ Kiviniemi, city engineer from Cedar Corporation, presented bids for the Albert and College streets project. The city received two bids. Kiviniemi recommended awarding the bid to McCabe Construction who had the lowest bid at $1,034,540. The council approved the bid.
Class "B" combination licenses
The council approved the class "B" combination licenses as presented except for Prescott Roadhouse LLC, St. Croix Liquor LLC and Point St. Croix Marina Inc. who were denied because the city doesn't have more class "B" liquor licenses available.
The council granted a class "B" combination license to Riverboat Properties LLC d.b.a. Vista Croix but did not issue the license. Riverboat Properties LLC was also told this is the last year it will be granted the license unless it has a project moving forward by November.
Police chief salary
Prescott City Administrator Jayne Brand presented a request from the Prescott Police Commission to increase the police chief salary range up to $85,000 (the current top range of the salary is $78,500.) Brand said this year the funding would come from the police department's current budget and in the future would need to be moved from the contingency fund to the police department budget. The council approved the increase.