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The Chisago County Board voted unanimously last week, with Commissioner Walker absent, to accept a bid selling $7 million in bonding to pay for roadwork.

The Board voted last month giving bond advisors time to market $10 million-- but in the interim-- the county engineer secured $3 million in advance road funds so the bond issue for these capital improvements was reduced.

The approved projects remain the same, with the biggest ticket items being the Keystone/Manning/250th reconstruction; three miles of CSAH 1 reconditioning in the north part of the county, from Shorewood Drive to Pine County, and the county share of $200,000 for a signal at #22 and old Highway 61 in Wyoming.

The county is utilizing "Build America Bonds" a stimulus program through which the federal government subsidizes the interest rate. BAB expires at the end of this year.

Carolyn Drude of Ehlers and Associates summarized the nine bids received; and also presented the Board with a framed certificate denoting a Moody's Investor Services bond rating upgrade. Chisago County went to an Aa2 bond rating, attributed to, as Drude stated, "strong financial operations and manageable debt levels" of the county.

The purchase was awarded to United Bankers Bank, based in Bloomington MN.

The interest rate without the Build America Bonds program aid is 4.07 percent. The rate the county will pay under BAB is 2.686 percent.

In brief, according to information left by Drude; the bond interest paid to the holder is taxable; but the American Recovery and Reinvestment Act of 2009 allows for interest and credits attributable to BAB to be treated as exempt from federal income tax for the purposes of state income tax. As an option to providing the tax credits to bondholders, there's also the "direct payment option" which grants the issuer (the county) payments equal to 35 percent of the interest payable on a date-- which is what Chisago County is participating in.

County Commissioner George McMahon, who made the motion to award the bond sale, commented, "This is a way to get projects done and it stimulates the local economy."

Drude reminded the Board about the expiration date of BAB and explained that the radio upgrade and 9-1-1 comm center projects could still be financed using BAB, if debt is sold by December. The Ehlers & Associates calculations are promising, in that a little over $11 million in bond debt could be encumbered while still keeping Chisago County's annual debt service levy at the target limit of $4 million.

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