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Bemidji City Council OKs bond sale for land for south shore redevelopment

The Bemidji City Council on Monday approved a resolution authorizing the sale of about $5.78 million in bonds to finance the land purchase for the south shore redevelopment.

The council voted 5-0 to approve the bond sale to United Bankers' Bank of Bloomington, Minn., at a true interest rate of 1.8503 percent. Councilors Barb Meuers and Kevin Waldhausen were absent.

Eight bids were received.

"(The bids) turned out extremely well," said Myron Knutson of Public Financial Management Inc. of Minneapolis.

The city in January 2008 sold $14.5 million in bonds to finance the land for the south shore development.

The bonds were sold as short-term bonds since long-term bond interest rates are about 4 percent higher than those of short-term rates, according to a memorandum written by Finance Director Ron Eischens.

The city is able to pay off $8.8 million of those original bonds due, in part, to four land sales, storm water and sanitary sewer funds, and a prorated amount from the sales-tax dollars.

Specifically, the following funding sources were presented:

- $350,000 from remaining cash from the original bond issue.

- $2.3 million from the Minnesota Department of Natural Resources for land that will feature the Paul Bunyan Trail. (Closing on this land sale is set for Thursday.)

- $729,323 from the land sale for the "Wye" property.

- $572,505 from the land sale to the Edgewater Group (Rich Siegert).

- $20,955 from the land sale to Lakeland TV.

- $1.1 million in storm water and sanitary sewer funds.

- $3,704,550, the prorated amount from $44 million in sales-tax bonds.