City gets bargain on arena bonds [UPDATED]Published 11:00am Thursday, September 8, 2011 Updated 11:01am Thursday, September 8, 2011
The Fergus Falls Port Authority authorized the issuing of $6.58 million in bonds for sale during a meeting before Tuesday night’s city council meeting. On Oct. 3, they will meet again to approve the sale of the bonds.
The city’s interest rate on the five-year bonds is a low 1.26 percent.
“That is just great,” said Finance Director Bill Sonmor. “Certainly I don’t think any of us have seen that for bonding before.”
The interest rate is one reason that the city is choosing to bond for the project instead of paying it out of fund balance, Sonmor told The Daily Journal. It is more profitable in the long run to let the funds earn money at a high interest rate.
“On average, we earn at least 6 percent on our investment portfolio,” Sonmor said.
The practice rink building schedule is progressing on time, but City Engineer Dan Edwards said the schedule for the main rink is slightly more than a week behind schedule due to various delays, including weather issues.
However, the contractor is hopeful that lost ground can be regained once the main rink is enclosed, eliminating element-related delays. The goal is to get the arena opened by the start of the 2011 high school hockey season. High school girls hockey teams can begin team practices on Oct. 31, and boys on Nov. 14, according to the Minnesota State High School League web site.
During the council meeting, the council also approved an expanded budget for the arena that accounted for $104,000 in additional funds pledged by the fundraising committee. The project has now grown to just over $7.5 million, although the city’s commitment remains steady at $4 million.
The funds will pay for the remainder of work on a heated observation deck, as well as the installation of backrests in about half of the arena seats.