Rosemount City Council Approves Over $2 Million in General Obligation Bonds

The approved Tuesday the sale of $2,080,000 in General Obligation Improvement Bonds for street construction and utility improvements for the Prestwick Place 2nd and 3rd additions.

According to city Finance Director Jeff May, on Tuesday morning six bids were opened and the low bidder, with a true interest rate of 1.519, was United Bankers Bank and the First State Bank of Rosemount.

According to a representative from Springsted, the city's financial advisor, Rosemount enjoys a solid aA2 credit rating, based on its sound operating practices and healthy general fund reserves, which accounts for the market interest in bidding on the bonds.

Bonds will be sold in increments of $5,000 and above, and will mature in five years. 

The City Council unanimously approved the acceptance of the low bid and the city expects to have the funds in hand by the end of the month.

The bonds will be repaid entirely by the developer, and there will be no need for a tax levy to pay for them. 

According to May, there was a time when it was standard practice for cities to issue bonds for developers. Due to tight credit markets and the fact that municipalities can get much more favorable interest rates than developers, cities are once again being asked to assist with financing in the form of bonds.