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North Mankato council concurs with $27 million bond for public works building despite resident objections
Summary
The City Council voted 3-2 on April 20 to concur with the North Mankato Port Authority’s issuance of $27 million in general obligation bonds to fund a new public works facility in the Timm Road South Development District after a court dismissed a legal challenge; residents raised concerns about tax burdens and the use of the Port Authority.
The North Mankato City Council voted 3-2 on April 20 to concur with the North Mankato Port Authority’s issuance of $27,000,000 in general obligation bonds (Series 2026A) to finance construction of a public works facility in the Timm Road South Development District.
City Administrator Michael McCann told the council that a lawsuit filed by a resident (Barb Church v. North Mankato Port Authority and City of North Mankato) was dismissed and that the judge found the Port Authority has authority to issue bonds and transfer the land to the City. Attorney Marin Magill explained that these are general obligation bonds that constitute a tax lien on all properties and therefore required the City’s concurrence.
Tammy Omdal of Northland Securities summarized the financing structure: the bonds were awarded to Mesirow Financial, Inc., with a true interest cost of 4.11 percent, level annual debt service over 25 years, final maturity on Feb. 1, 2052, and an optional call date of Feb. 1, 2034. The financing package received an S&P rating of AA and total project funding sources—counting premiums—were reported at about $27.9 million.
Council Member Peterson moved and Council Member Whitlock seconded adoption of Res. No. 48-26 to concur to issuance of the bonds. The motion passed 3-2: Peterson, Whitlock and Mayor Carlson voted aye; Council Members Oachs and Steiner voted nay.
Several residents urged the council not to proceed without broader public vote or unanimous council support. Barb Church said she did not agree with using the Port Authority for land acquisition or financing and insisted residents should have been allowed to vote. Tom Hagen told the council the project could become a financial burden and said the City should delay construction until fuel prices drop and, in his view, should seek a unanimous council vote to move forward. The record also shows repeated public requests for more direct citizen input on major capital projects.
Proponents and city staff said the financing structure and legal review support the project. Attorney Magill and staff stressed the legal finding that the Port Authority had the authority to issue bonds and that, because the bonds are GO-style obligations, they are backed by ad valorem taxes as pledged to the bonds.
Next steps: With Res. No. 48-26 adopted, the City concurred with the Port Authority to proceed with the Series 2026A bond issuance under the reported terms. The council subsequently adjourned to closed session at 9:10 p.m.
