By LINDA LOBECK
IRON MOUNTAIN - Iron Mountain City Council decided to wait until the presidential election before moving ahead to refund the 2004 water bonds.
With the election here now, the council will meet on Monday, Nov. 12 for a special meeting to discuss the refunding resolution and other information.
The council had a letter from Thomas Enright of Troy, Mich., the financial counsel, on what they are considering including the steps that they have to take to refund the bonds.
"It's really a scope of services agreement so we can get things going," said City Manager Jordan Stanchina.
The city has consulted with a financial adviser to discuss refunding the bonds that are currently going to expire in 2034. Stanchina had said that there might be a significant savings if they refunded the bonds with $4,005,000 of principal remaining and $2,552,045 of interest.
Three possible scenarios are being considered to set up a 15-year refunding that would take seven years off of the bond. The gross dollar savings of each option varies as well as the contribution by the city, ranging from no cash to $575,000 cash contribution.
The city has some time before a decision has to be made since they can't pay off any of the bonds until they are first called on March 1.
Councilman Ted Corombos said that they have negotiated the final price for both the financial counsel as well as the bond counsel that will be working with the city.
"We talked about putting $295,000 into the pot and $25,000 more a year to pay the bonds off in 15 instead of 23 years unless we want to put in $575,000 for a contribution," Corombos said.
Stanchina felt that the $575,000 might be too much at this time because the city may need this money for other needs. "But by refunding, we bring it down by eight years," he said.
Copies of the proposed agreement will be sent out to council members this week prior to the next meeting.
The council had decided to wait to see what happened in the presidential election as well as in the House and Senate races to see how the results would impact the interest rates. A change of presidents could have a significant impact on interest rates and potential savings, they said.
During Stanchina's report to the council, he also discussed the one proposal that the city received following their request for proposals for the property at 101 N. Stephenson, which is commonly referred to as the old Khoury property.
A meeting was held with all interested developers and only one was submitted. This proposal will be discussed with the committee of the council assigned to work on trying to find a buyer or buyers for the property.
In 2007, the Tax Increment Finance Authority (TIFA) purchased the former Khoury Inc. property on North U.S. 2 for $875,000. The furniture maker has since gone out of business after moving to a new location in Kingsford.
The 11.1 acres has sat idle since that time not drawing any taxes for the city. But with the retirement of TIFA in July, the property comes into the possession of the city. Although TIFA purchased the property for $875,000, the value of the property is $550,000 today. The first step in the city's real estate purchase property was to request purchase proposals.
A report was also given at Monday's meeting about the 425 agreement between Breitung Township and Iron Mountain for Area 2. Representatives of both parties had met Monday to discuss it - specifically the utility services agreement. Stanchina said that in that agreement it calls for a joint planning commission between the two municipalities to make recommendations for zoning in the areas under the 425 agreement.
Stanchina said that the committee discussed a template for this joint commission, which should be put into the Area 2 agreement.
"We are concerned with them (Breitung Township) making changes to that area in regards to zoning and we take it over. We want to make sure that any changes are harmonious with what we have in that area," Stanchina added.
In other action, the council:
- Approved the Election Commission recommendation for a food stipend for election inspectors for the city of $25 for a full day and $12.50 for a half day. "This keeps the pay comparable with other local communities," Stanchina said.
- Agreed to closing the city hall offices the day after Thanksgiving as has been done in previous years. Employees use a vacation day or no pay to have the day off.
- Reappointments made included Clark Lebo to another term on the Iron Mountain Tree Board; Barb Kramer to another term on the Downtown Development Authority Board; and Mike Nicometto to another term on the DDA Board.
- Approved payment of $36,466.27 to the Michigan Department of Transportation for the Small Urban Project that included two blocks on Park Avenue from D Street to F Street and six blocks paved on West B Street.
- Approved a request from the Office of Veterans Affairs for a $300 contribution to the Share Your Christmas Program. This money is in the city's budget this year.
Linda Lobeck's e-mail address is email@example.com.