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Serving Northern St. Louis County, Minnesota

Political theater

Meeting in Cook movie house, board OK’s road bonding

Tom Klein
Posted 3/25/15

COOK – St. Louis County commissioners unanimously agreed to borrow $40 million for road and bridge repairs, relying on future revenues from a new countywide sales tax to pay off the …

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Political theater

Meeting in Cook movie house, board OK’s road bonding

Posted

COOK – St. Louis County commissioners unanimously agreed to borrow $40 million for road and bridge repairs, relying on future revenues from a new countywide sales tax to pay off the bonds.

Tuesday’s meeting was held in the Comet Theater, giving new meaning to the phrase “political theater,” and drew one of the largest audiences to attend a county board meeting.

While the meeting’s location provided an opportunity for folks from the northern tip of St. Louis County a chance to air their concerns, the main topic on the agenda was the sale of $40 million in bonds.

“This is a great investment in infrastructure and jobs,” said Commissioner Keith Nelson, who said the county has not provided adequate funds for roads and bridges for the last quarter-century. “It shows on every road we drive and every bridge we cross.”

Other commissioners shared Nelson’s enthusiasm and noted that several of those speaking during the comment period had voiced concerns about roads and bridges in their regions, helping build a case for the need for repairs.

“It’s a win-win for us,” said Commissioner Patrick Boyle, who said bonding now for projects allows the county to take advantage of low construction costs, driven in part by cheaper petroleum. “If we don’t have safe infrastructure in St. Louis County, we’ve got nothing. If we don’t have safe roads to get our grandkids and kids across, we have nothing. If we don’t have good roads for loggers to use, we have nothing. It’s a step in the right direction.”

While the county is doing its part, Boyle added that the state and nation also must be willing to invest more in infrastructure.

New sales tax

In December 2014, commissioners approved a one-half percent sales tax earmarked for roads and bridges. The tax, which takes effect on April 1, is expected to generate between $10.5 million to $12 million annually, although Commissioner Nelson predicted it would raise $13.7 million a year.

County officials want to get a jump-start on long-stalled projects by selling $40 million in bonds. About a third of the county’s paved roads are in very poor condition while about 20 percent of the county’s 600 bridges are considered deficient, according to county officials.

Public Works Director Jim Foldesi told the board that low-interest rates and low construction costs factored heavily in the decision to borrow funds for projects.

“The longer you wait to build something, the more expensive it is,” said Fodelsi.

Under the proposed payment schedule, the bonds would be paid off over 15 years at an interest rate of 2.73 percent, according to Terri Heaton, senior vice president for Springsted, the St. Paul-based firm that provides financial advice to the county.

“Going forward, we will be looking at about $3.3 million in bond payback that will come off the $10.5 million or $12 million that we receive in revenues each year,” said Fodelsi. “So the remainder will become what we’re calling in this program as pay as you go.”

Commissioner Tom Rukavina asked if Foldesi was confident that the ambitious slate of projects could be handled by local contractors.

“We talked to our contractors and they believe they can take on this work,” said Fodelsi. “The one thing that we’ve always said is that, especially when it comes to bridges, we have some flexibility here. For instance, we have a lot of bridge projects in 2016 in this program. If we start to let those projects and see those prices are creeping up — and that is an indication of contractors reaching their capacity — this package allows us to build some of those projects in 2017 if necessary.”

Nelson noted that $40 million, while significant, would not address all the county’s infrastructure needs.

“But it is going to be a large step forward to address some of the inadequacies that have been put out there probably for the last 25 years,” he said.

The county board is scheduled to receive bids on the bond sales on May 11 at 1 p.m. and award the bonds on May 12. The bond sale is set to close on May 28.

County Administrator Kevin Gray noted that the $40 million is in addition to $65 million in state aid already budgeted for roads and bridges, bringing the total investment in infrastructure projects on the slate to $105 million.

“This has been a collective effort to look at what’s best for our residents across the entire county,” Gray said.