City takes on record debt
Minot city manager David Waind stressed the urgency of more state oil impact assistance as the Minot City Council Monday approved $37 million in debt obligations a heavy burden that could affect the city’s bond rating.
“Clearly, the debt that is being incurred is the result of the growth we are experiencing,” Waind told the council. “The help we have gotten has not been sufficient to take care of the tremendous amount of growth that the city is seeing. We have never seen the kind of bonding that we are having to do tonight.”
A more typical bonding level for the city is about $4 million, city finance director Cindy Hemphill said. She told the council that Moody’s, a bond rating corporation, has warned the city that it may not be able to maintain its Aa2 rating with $37 million in debt. The city’s “high quality” rating is not the highest rating but reflects improvement that the city made a few years ago.
The bonding includes $12 million for refunding improvement bonds, $6.9 million for general obligation highway bonds, nearly $5.5 million for water and sewer utility reserve revenue refunding bonds and $12.77 million for airport revenue bonds.
Waind said conversations have started with legislators to see if additional oil impact money might be available in the 2015 legislative session to offset what he called “tremendous costs.”
He noted Minot has gone from having one of the lowest utility rates among major cities in the state to near the highest, if not the highest. The impacts include double the garbage collection of four to five years ago, Waind said. The street system has increased by 25 to 30 percent. Traffic on Broadway is up 60 percent.
Waind said building permits trailed last year’s pace until last month. October building permits totaled $67 million, bringing the year-to-date total to $244 million. Compared to annual totals of previous years, the 2013 building permits already are the second highest on record. Waind said there are a number of projects that weren’t able to proceed this year so it is expected that next year’s building permits could be even higher.
Waind estimated the city population at 50,000 residents, up about 10,000 residents in three years.
“So when we make the case to the state that there’s a need for assistance, it’s based on real numbers,” he said. “We have significant needs. We need significant assistance from the state.”