LGA Cuts prompt discussion

As potential LGA cuts loom around an already tight City of Starbuck budget, the city council moved during its regularly scheduled meeting on February 9, to refinance a 2002 General Operating Water and Sewer Bond. The hope is the refinanced bond will save the city approximately $46,000- $51,000 over the next eight years.

Though the actual savings to the city will not be known until the refinancing bond is approved by the council, Steve Mattson of Northland Securities said now is the time for the city to take advantage of the near all-time low interest rates for general operating bonds. As of the meeting last Monday, Mattson reported the current interest rate for the new bond stands at 2.187 percent, but could change by the time the final refinancing is approved. Should the city wait in refinancing the bonds, Mattson cautioned interest rates could rise and the city could lose out on an opportunity to save money.

Mattson said the bonds will be AAA rated and guaranteed by the State of Minnesota. The program is set up through the state for water and sewer bonds.

Should the city move forward with the refinancing bond, Mattson guaranteed the new bond wouldn't cost the city a penny, unless the application was approved by the state.

"To tell you the truth, I talked to the Mayor last week and if you go forward with this, it's really no cost to you guys," he said during the meeting on Feb. 9.