New Prague council gives preliminary approval to police-station CIP, tables bond sale resolution

The New Prague City Council gave preliminary approval on March 17 to a Capital Improvement Plan (CIP) that sets a not-to-exceed amount of $13,000,000 for a proposed new police facility, but tabled a second resolution that would have authorized the immediate issuance and sale of general obligation bonds to finance the project.

Rebecca Kurtz, municipal finance adviser with Ehlers, told the council the presale report proposes “a bond issue in the amount of $12,840,000” and described how the city could structure debt. She said the proposal assumes a 25-year term, a true interest cost assumption of about 4.5 percent and an underwriter’s fee that could be up to 1.1 percent, and noted the underwriting and closing schedule would put proceeds in hand in May if the council moves forward.

The CIP matters because Minnesota law limits how much a city may issue in debt paid solely by property taxes and also limits annual principal-and-interest payments as a share of market value. Kurtz said the CIP package is written to meet those statutory tests and to provide flexibility for final structure.

Council debate focused on timing, cost and taxpayer impact. Councilmember Sean questioned advancing the financing ahead of bids for the…