County Board approves funding for Rural Water Project
Rock County Commissioners approved funding for a Rural Water expansion project during their meeting Tuesday, May 19.
The Rural Water Board was awarded a $2.448 million loan and $2.246 grant from the USDA Rural Development to finance the water improvements.
However, because rural water does not have enough in reserves to fund the upfront construction costs before being reimbursed by USDA, the commissioners are seeking a short-term construction loan.
Two loan options were presented on May 5.
George Eilertson from Northland Securities of Minneapolis said his company is prepared to purchase the $2.448 million loan and work with local banking institutions for financing.
“The better the credit of the municipality borrowing the money, the better open financing works,” he said.
Rock County’s credit rating of AA+ could garner an interest rate of 1 percent or less, Eilertson said.
Another funding option is through the Minnesota Rural Water Association’s finance pool.
Speaking via conference call, executive director Ruth Hubbard said the association created a joint powers board in 1999 to help its members with interim funding for water improvement projects such as Rock County’s.
“This program works well with communities who don’t have a (credit) rating,” she said.
Hubbard said rural water’s program has an interest rate of 3.4 percent and is only applied as money is drawn from the loan pool.
“It also works well with projects whose construction is halted by cold weather,” she said.
Rural water also offers rebates based on accrued interest. On average, rebates average about 20 percent, Hubbard said.
The unpredictability of weather delays was the main reason commissioners opted for financing through Northland Securities, whose terms were more favorable if the project completion stretched past one year.
In other business, the commissioners:
•Rescinded an April 21 resolution transferring county municipal funds to the regular construction funds account.
“I have not done this before so I skipped a step,” said County Engineer Mark Sehr. “You need to have a public hearing according to Minnesota state aid rules.”
The public hearing was conducted May 19 with no public comments submitted, and the board unanimously reapproved the fund transfer.
•Approved on May 5 a five-year law enforcement contract with the city of Luverne.
The contract includes annual 2 or 3 percent increases and a change in the base contract amount due to the removal of the crossing guard program.
Contract amounts range from $808,000 in 2016 to $892,000 in 2020.