MASON CITY — The financial professional handling the sale of $12 million worth of general obligation and urban renewal bonds for the City of Mason City says it’s one of the best municipal bond sales he’s had in a quarter century.
The City Council this week approved resolutions accepting bids and directing the sale of general obligation bonds and taxable general obligation urban renewal bonds totaling $12 million. The council earlier this year during their budget session approved a five-year capital improvements plan with projects to be funded with the $5.9 million of general obligation bonds. The $6.1 million of taxable urban renewal bonds will cover the anticipated costs of the River City Renaissance project.
Larry Burger is vice president of Speer Financial Services of Waterloo. He says Tuesday was an exceptional day taking bids for selling the capital improvement bonds. “I’m here to report that in 26 years of being a financial advisor, this may be my lowest interest rate on a 10-year bond that I’ve ever gotten. The timing is perfect on this bond, because I will recommend that we take the low bid of Northland Securities of Minneapolis for a very low interest rate of 1.5717%.”
Burger says he was also impressed with the low bid for the urban renewal bonds. “The bid came in from Robert Baird at a 2.6363%. Now again, that is an extremely low bid even that it’s a percent higher than the tax-exempt, but on the other hand, it’s 10 years longer. So it’s just like refinancing your house, you go 30 years it’s a lot more than if you go 15. That takes into play the extra 10 years, so you’re only talking 1.06% higher in the tax-exempt but again on a 10-year bond.”
Councilman John Lee asked Burger if the low interest rates on these bond purchases shows that Mason City is a good investment. Burger says, “Anytime you’re in a AA (bond rating) situation, you’re an excellent credit.” Lee says, “I think it’s important that we say to the citizens that these people feel Mason City is a great investment, that we’re something to invest in, and that kind of goes back to city finance director Kevin Jacobson, previous councils and city administrators, the new city administrator, and the direction we’re going. It’s great to hear that Mason City is a good investment. Two weeks ago when we were here, we talked about $100-some million being invested in this community, and now we also have people willing to buy our bonds. Thank you very much, and I think it’s a great sign for our town and our city and the direction we’re headed.”
Among the largest items to be covered in capital improvement projects include $1.6 million for water meter replacements and $580,000 for sewer collection system maintenance.