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Advisor recommends MRWA loan for Mantorville share of Highway 57 work; borrowing estimated at $440K
Summary
City financial advisor Mike Bubany advised the council to borrow roughly $440,000 via a direct bank placement using the Minnesota Rural Water Association loan program to fund utility costs tied to the Highway 57 reconstruction; non-utility costs (~$73K) should be paid from cash to avoid borrowing for them.
City Financial Advisor Mike Bubany provided preliminary financing guidance for Mantorville’s portion of the State Highway 57 reconstruction. Bubany recommended the city cash out non-utility costs (estimated at about $73,000) and borrow only for utility-related costs, estimating a borrowing amount near $440,000.
Bubany said a rated public bond sale would not be cost-effective at that size despite Mantorville’s strong credit, and he recommended a direct bank placement through the Minnesota Rural Water Association (MRWA) MIDI Loan Program. He noted that total payments across alternatives were similar in his comparison but that MRWA would allow a quicker, lower-cost execution to meet MNDOT’s requirement to provide funds 30 days after the bid date.
Bubany proposed a 15-year term with water and sewer revenues pledged for repayment. He recommended the council wait for final bid results after MNDOT’s Jan. 26, 2024 bid date, then meet again to finalize the borrowing (proposal for council action on Feb. 12 and closing Feb. 26, 2024).
What happens next: Engineers must provide final cost breakdowns (utilities vs. non-utilities) once bids are returned; Bubany will prepare a financing proposal for council consideration in February.
