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Marshall Council accepts bonding bids

July 10, 2013
By Deb Gau , Marshall Independent

MARSHALL - City bonds were one of the main items on the Marshall City Council's agenda Tuesday night. Members of the council approved the sale of about $3.64 million in general obligation bonds.

Terri Heaton, of financial advisory company Springsted, presented the council with bond bids received Tuesday morning. Heaton said the city had received a total of six bids.

"There's been tremendous interest from the market," Heaton said.

Of the six bids, the low bidder was Piper Jaffray & Co., Heaton said. The general obligation bonds would have a term of 10 years, at a 2.27 percent interest rate. The bonds will be used for street improvement projects, improvements at the airport and capital costs like equipment replacements and city bridge projects.

Heaton also commented on Marshall's long-term credit rating in relationship to the general obligation bonds. Standard and Poor gave the city a rating of AA- and considered the city's rating to be stable, Heaton said. Several factors contributed to that rating, Heaton said, including Marshall's status as a regional economic center, its strong reserves and moderate overall debt.

The news was good to hear, said Marshall Mayor Bob Byrnes.

"For us to maintain that financial rating and positive comments on that, is very good," Byrnes said.

Council members voted to accept the low bid. Later in the meeting, council member Jennie Hulsizer asked if council members could have some additional information when discussing bonding. Hulsizer said she would like to know how much debt the city retires each year, instead of just how much debt the city is taking on.

At Tuesday's meeting, the council also dealt with three items of business involving the construction of water and sewer lines serving Marshall Airpark East. The lines would help create a "shovel-ready" area for future development at the airport, said Marshall Public Works Director Glenn Olson.

Council members voted to approve a resolution declaring the city's intent to pay for the project through tax-exempt bonds. However, they had more discussion over the bids received for the project.

Olson said the apparent low bidder, States Borders Construction, Inc., had an irregularity in its bid. States Borders' bid included a 5 percent bid bond instead of the 10 percent the city required. Olson said it would be up to the council whether to waive the irregularity and accept the bid.

Marshall City Attorney Dennis Simpson said the main question to consider on the matter was whether the change in bond would give the contractor a significant advantage over the other bidders. Simpson said he consulted with the city's insurance adviser and was advised that there was no real advantage and no real financial difference to the city in having a 5 percent versus a 10 percent bond.

However, council member Larry Doom said, the bid did not comply with the city's specifications.

Council members voted 4-3 in favor of waiving the irregularity in the low bid. Council members Doom, Hulsizer and Mike Boedigheimer voted against the proposal.

The council also voted 5-2 in favor of accepting the bid from States Borders Construction. Hulsizer and Doom cast the dissenting votes.

In other business, the council voted unanimously to update portions of the Marshall city charter dealing with the city administrator's official duties. Marshall City Administrator Ben Martig said the amendment would allow the city administrator to make decisions on administrative procedures without needing council approval first.

The Marshall charter calls for the city administrator to "prepare an administrative code incorporating details of administrative policies and procedures." Martig said the proposed charter amendment would allow the city administrator to establish or amend procedures in that administrative code without having to wait to go before the city council. However, he said administrative policies, which are part of the city code, would still require council approval before they could be changed.

Council members voted in favor of the proposal. A unanimous council vote is required to amend the city charter.

The city council got an update on the Avera Marshall Medical Center at its Tuesday meeting.

Avera Marshall President and CEO Mary Maertens gave a bi-annual report on the Avera Marshall Regional Medical Center to the council members.

As Avera gets closer to breaking ground for its planned cancer center, Doom expressed concern about where workers would be parking during the project. The residents of Bruce Street had problems with parking in front of their houses in the past, Doom said. Maertens said there would be plenty of space in existing parking lots at the hospital, and no street spots would be sacrificed.

Maertens also connected her report to the discussion of Marshall's credit rating. The sale of the municipal hospital to the Avera system may actually have been a positive for the city's credit rating, she said. She pointed out that the city of Willmar recently dropped points on its credit rating because it still has a city-owned hospital. Maertens said because of coming health care reforms, health care is considered an unstable industry for cities to be involved with.

Maertens said Avera Marshall's programs are continuing to grow. By the end of the calendar year, there will be more than 30 specialists on staff. It opened a new clinic in Ivanhoe as well.

The council voted to rezone a piece of property along London Road from residential to industrial. The vacant property is completely surrounded by businesses. Olson said the city has had some requests for industrial expansion in that area, but no houses have been built there.

- Staff writer Samantha Downing contributed to the article

 
 

 

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