The Hillsboro City Council approved at its June 5 meeting a financial services agreement with Piper Jaffray as the city prepares to begin street projects this summer.
One of the major project is to replace Wilson Street once the city replaces the old waterlines in that residential area. The city will be using the state’s revolving loan fund to cover the expense of the waterline project.
“The street project will be operated with general obligation bonds,” said Larry Paine, city administrator. “There are some thing we need to do to properly notify the financial markets about the offering we want to do, and how to get that information to them.
“We’ve been using Piper Jaffray as our financial adviser,” he added. “They give me the advice I need to put together a package that we can put in the marketplace to receive the bonds.”
Paine said the combined Wilson Street project—new waterlines and new street—may take up to 18 months to complete.
Paine said one street project—the rebuild of B Street north of Tabor College—is now completed, using funds borrowed from the city’s four utilities.
“The next project that will come up is a mill and overlay for D Street,” he said. “Then, as the water project begins to kick in we’re going to have other projects that are going to happen further down the calendar.”
Paine said one funding strategy would be to use a temporary note that will give the city the ability to do the projects, and then arrange a final bond issue when the city knows the total expense.
“That is going to involve some additional interest expense on the front end, but we’re hoping that by waiting to go through all the bidding process, some of those estimates that we already have will come in lower,” he said, “B Street was significantly lower than the project estimate from the engineer.”
Paine said, “The other way of dealing with funding is to take the estimates we got from the engineer—roughly three to four million dollars—and hope we’ve got enough money in that thing to pay for all the expenses.
“Then, if we got a significant amount less than we budgeted, we figure out a way to refund that.”
Paine said he wasn’t comfortable trying to do a full bond issue for all of the street projects that the city could take to the market now.
“I don’t have the confidence that the budget estimates we got are going to be what we pay,” he said. “I think it’s going to be lower than that.
“Pulling out a temporary note makes a lot better sense, even though we’ll have some initial interest financing with that,” Paine said.
“With the use of temporary funds, we will be in a better position to have construction bids known, and can do a permanent financing with what we actually spend, opposed to an estimate that could be either too high or too low.”
The council voted 4-0 to go the route of temporary funding.
In other business, the council:
◼ voted to receive the city’s 2017 audit report as completed by Adams Brown, Beran & Ball.
Grace Huxman, representing the company, reviewed the document with the council and said, “This is a clean opinion on financial statements. There were no budget violations in 2017.”
◼ agreed to move the date of the next meeting to accommodate travel schedules. Paine said he would email council members for feedback regarding a June 22 meeting date at the usual 4 p.m. starting time.