Focusing for the final months of the Safety Center process

As some of you may be aware, I have long been troubled by the safety center project and, even more, by the safety center process. However, unlike some of the most vocal opponents, my concerns are not driven by passionate charges of questionable ethics or legality, but instead are driven by perceptions of flawed process and product.

I’m sure that there will be some who will quickly challenge or deny my version of events. However, based on what I’ve heard from at least a half dozen people who were directly involved, in at least some point, and had a verification of my memory by three of the people in the last week, I believe my version is more than adequately accurate and, more importantly, captures the true essence of the process and the product.

About a dozen city staff members met for twelve months and developed the conceptual plan for the safety center. Then a task force was formed; it consisted of the original twelve city staff people with the addition of six citizen representatives. This task force was given three months, not to consider the facility’s problems or solutions, but to provide a quick review of staff’s plan.

Two of the citizen members, the two with decades of experience in real estate development and construction, were so disturbed by staff’s plan that they issued a minority report. Although these citizens were attacked for their report, they raised enough valid concerns so that another task force was formed. This group included the same dominance by city staff and the citizen members were generally more supportive of leadership’s agenda. However, one of the citizen members, the one with decades of real estate development and construction experience, supported the conclusions of the minority report.

There were two more task forces, mixes of staff and councilors. As I recall, one looked at the feasibility of reusing the existing safety center facility and one was to consider sites for a new facility. Neither group explored, much less challenged, the assumptions or recommendations of the original staff report.

In my opinion, this was a closed, unhealthy, adaptation and innovation-preventing process. There was no genuine citizen involvement that would, in my opinion, characterize a positive, creative, and successful process, particularly one for a project that was characterized by Northfield’s leadership as being of such high priority and by Northfield’s taxpayers as being of such substantial burden.

The result of this closed, unhealthy, and innovation-stifling process was, I believe, a flawed product. Specifically, I fear that we have a plan that does not meet our greatest needs, requires development costs which are excessive and unproductive, takes resources from higher community priorities, and will produce operating costs that are so much more than our current costs that we will be forced to cut services or raise taxes.

Like the “minority” members, I have some experience in real estate development. When developing a facility for a client, we started with the programming, or “needs” and then proposed a space program, or “solutions”. The needs for the safety center have been all over the map.

Based on my memory of Northfield News articles, there have been a series of “crises” that we needed to address. These crises, captured in separate, alarming Northfield News articles, included: 1) the fire truck garage bays, 2) the flood plain, 3) the joint training room, 4) the drunk tank, 5) the police car computers, 6) the puddles and the mold, 7) and the staff offices.

For these ever-changing needs, or crisis, there was one solution: build a new safety center. It was a single facility that cost $10.5 million…or, according to those with the knowledge and experience, $12 million. Or it was two facilities that would not cost more than $8.25 million. Finally, it was a new police station, or Phase 1 as the Mayor called it, for $7.2 million, with either a redevelopment of the present site or a new fire department addition to the new police station, Phase 2 according to the Mayor, for an unknown additional $ millions.

Back when I was involved in real estate development, it was not uncommon for clients to want more than one possible proposed solution for a programming problem or need. A wise local man referred to these as the “Chevy-Buick-Cadillac” options. In my opinion, we started with the Cadillac and moved to the Hummer.

Off the top of my head, I could toss out some “Chevy” solutions. For 1) the fire truck garage bays, add a bay or two on the current site, 2) for the flood plain, build that $160,000 (if I recall) dike around the southeast corner, 3) for the joint training room, rent a facility for the once or twice a year event, 4) for the drunk tank, build where the required medical personnel are already in place, perhaps in a location that could service a larger region, 5) for the police car computers, buy detachable computers, 6) for the puddles and the mold, mop up the water and turn the dehumidifier back on, and 7) for staff offices, either a) keep the officers in their cars with their computers or b) store some of the file cabinets at a different site.

Now, I realize that some of my simple solutions might actually be simplistic. I sincerely don’t want to trivialize any of these issues, and I am deeply committed to meeting the needs of the police and fire departments, through an affordable and sustainable plan. However, I just want to demonstrate that I was able to quickly come up with alternative solutions to spending $ millions on a new facility. Actually, I guess my proposed solution for the fire truck garage bays isn’t really “mine”, it’s right out of the March 2007 “City of Northfield Minnesota Municipal Facilities Space Needs Analysis” by Hay Dobbs. It was part of an earlier, was it $3 million, plan to renovate the existing facility.

But the bonds are sold and an entity, either the City or USBank, is going to build a new police station in the southwest corner of Northfield. Perhaps there’s still an opportunity to insure that building a garage for police cars and offices for police staff will meet their, and the community’s, police facility needs at a cost that won’t limit the community’s ability to address other priorities.

In my opinion, the best way to assure an effective plan and successful product is a truly open process that includes a healthy amount of participation by those with the essential knowledge and experience. Perhaps the “Minority Three” might participate, one more time, in a more balanced and open process.

In order to assure an open, invigorating process, resulting in an effective and sustainable product, I would suggest that commercial property taxpayers also be included. The financial burden of both the development and operations of the police and fire stations are borne by taxpayers, commercial property owners at three times the burden of residential property owners per dollar of value. No one will be more motivated to work to assure that Northfield citizens get the biggest bang for their bucks.

We’ve got just a few months to insure that all of the time and talents invested by our community’s leaders are well spent; now is the moment for the final focus. Let’s put together a balanced team, for an open process, and achieve an effective, and sustainable, solution.

41 thoughts on “Focusing for the final months of the Safety Center process”

  1. Ross,

    Of the current council, there will only be 1 remaining councilperson from the 5 who voted in favor of this project. Rather than “focusing for the final months”, I would prefer that the Council not take any further actions that lead us further along a path from which we cannot recover.

    I agree that the process was essentially flawed from the beginning, and for many of the reasons that you provide. The final flawed part of the process was not putting the matter to a public vote.

    Neither the future council nor the people have to accept the judgment of this council.

    1. David L, I know this has been discussed but for the sake of people paying closer attention now, how is this not a done deal since the bonds have been sold?

      Sept 25 Strib:

      Finance director Kathleen McBride confirmed that remaining bonds for the project were bought last week by underwriter Dougherty & Co. of Minneapolis. She said Dougherty had sold about $3 million worth of bonds to financial institutions and others in August and the firm bought the rest itself for later resale. Only $6.28 million in bonds was sold, McBride said, because the council had voted to use $1 million of city reserves for the project. The city will make semi-annual payments to U.S. Bank, which services the debt, McBride said. The bonds include no money for repairs to the 42-year-old public safety building, which will continue to house the fire department.

    2. Griff,

      I want to qualify my answer: First, I don’t think anyone understands the various obligations. The documents to accomplish this task required 551 pages of legalese and financial mumbo-jumbo; second, as far as I can tell, this type of city “bond” financing, called “Certificates of Participation” are not in Minnesota statute; and third, this type of financing is not included as a type of permissible financing under Minnesota law.

      Consequently, I don’t know if it matters that the bonds were sold. I don’t think they are City bonds, and to the extent that they are City bonds, they are illegal. I am of the opinion that these bonds are owned by USBank. (Which raises the problematic question of what happens if USBank doesn’t pay the bonds and the bondholders sue USBank to recover the building.)

      As I understand the contracts for this non-statutory financing, the City’s only obligation is to make lease payments for the next 20 years. Even that obligation is of limited consequence because the lease payment must be subject to appropriation in each year of the 20 years. If, and only if, the City makes the payments for the next 20 years will it become the owner of the building.

      If the Council doesn’t make the lease payments for any reason, USBank still has to make good on the bonds.

      1. Davd L: I don’t understand this statement of yours: “and third, this type of financing is not included as a type of permissible financing under Minnesota law.”

        Certainly, with all the lawyers and Ehlers (city’s financial/bond counsel) reps involved , the process is allowed under MN law …

        Could you be more specific as to the ‘non-allowance’, in your opinion?

      2. Kiffi,

        The law requires that all municipal public debt be subject to election or to a reverse referendum. This debt was neither.

        When I have asked for an attorney’s opinion on the validity of this debt the City Council called for a “secret” meeting, but never issued an opinion letter. In my opinion letter to the City Council before the vote, I cited Attorney General opinions right on point saying that this type of debt requires an election. I received no response.

      3. Whoa !!! “no response”.. and to a person who is a candidate for elected office?

        Now there’s “arrogance”, IMO. Very sad to hear.

  2. Ross,

    Thanks for this post. It helped clarify for me what really is at the heart of my unhappiness over this Safety Center issue. Like many, I would like to see things move ahead. But I think you’ve nailed it–the crappy process used to arrive at the decision makes it impossible to tell if the plan is a good one or not.

    This flawed process seems to be a staple of “the Northfield way.” We have some individual or small group of “enlightened” administrators who believe they know best; they come up with a plan, then seed committees with their friends and allies to ensure that their plan will be the only one considered.

    This is a crappy way to proceed. I hate to say it, but given how crappy this Safety Center process was, I think we need to go back to square one and THIS TIME, have a good, transparent, open process that is not being directed by any one or small group of administrators. And I think we need city councilors who will ask tough questions and not tolerate the shenaigans the current council has.

  3. I very much applaud your post on this issue, Ross, and the two comments so far…
    But the issue remains that the Council did not ask the hard questions , although they say they did, and the study committees (both citizen and council ) did not push hard enough for answers raised by the ‘outside’, and so once again we are left with a mess because many people are of the opinion the process was so unhealthy, and that is an appropriate term to use, IMO.

    Why were the “hard questions” not answered?
    Why do councilors, at least publicly, almost always defer to staff?
    Why does staff always get involved in policy making, rather than leaving that exclusively to council?

    And most relevantly, what is to be done about this?

    IMO, NF councils have a cultural problem in that they feel badly about defining the roles of Council and Staff.
    As I see it, the Council is the only policy maker (except for public when an issue is put to a public vote) and the Staff is the support/information/facilitator team.
    OR, it could be said a bit more bluntly: the Council is the Employer; the Staff are the employees. Period.

    I ask the two Davids, the new councilors: Will you take the position that the staff is there to use their professional expertise to support the elected officials in all their needs for information, but “stay out of the policy realm, thank you” ?

  4. David, Kathie, and Kiffi –

    Thank you for commenting on my post. I greatly appreciate your feedback.

    David –

    If I understand your perspective on the legal structure of the deal, the City has not entered into a financing agreement but rather has entered into a lease agreement. It seems that your plan is to break the lease agreement and never occupy the space that USBank is building. I think we share a dissatisfaction with the process, concern about the financial impact, and uncertainty about the physical product. You seem to have hope that we can reverse the process and mitigate the impact. I guess I have given up on those two aspects and am focusing on trying to achieve an acceptable outcome for the physical product…a facility that meets the current and projected needs of the community. Perhaps you are right and I am wrong.

    Kathie –

    I think you have done an excellent job describing the process. I would also agree with you that it is not an unfamiliar process, particularly over the past four years. As I said to David, I am not hopeful that we can go back to square one on the project/process; I only hope for tolerable lemonade. After watching the last eight years down at City Hall, I am also not optimistic about support for dissenting opinions. Based on my observations, members of the small group label the dissenters as uninformed, destructive and/or mean and the paper’s editorials, opinions, and anonymous commenters take up the refrain.

    Kiffi –

    I’ve been watching the process for eight years, you’ve been watching it for many more years. I would agree with Kathie and you, it seems to be “the Northfield Way” and part of the culture of our municipal process. At a Chamber Forum with elected officials on this topic probably two years ago, I sat in front of two City staff members who were very involved with the safety center process (both are no longer with the City). They were criticizing the approximately 90 citizens (including architects, engineers, contractors, and property managers) in the room who were already expressing design, development, construction, and operational concerns about the process and the product (du jour) by saying “they should butt out and leave it all up to the professionals”.

    1. Ross… It’s a good thing I didn’t hear that comment or I would have been compelled to turn around and say, “you are the ones who should “butt out” because true municipal professionals realize that they have no jobs without the citizens who have come together to form a city, which then creates their jobs.”

      That situation is representative of the typical monumental BS, and false ‘professional’ arrogance that plagues so many projects here…. and I don’t say that without having other examples in mind: the first that comes to mind s the Jefferson Road design discussions, where the engineering contractors sat to the side laughing behind their held-up papers, while Councilor Buckheit presented her far superior design.

    2. Ross,

      I don’t think anyone really understands what it is the City did – including this council, the staff, and perhaps even our lawyers and financial folks.

      There is obviously a “financing arrangement”. The common terminology is that the City issued “Certificates of Participation”. No one really know what that terms means because certificates of participation are not defined by statute. By statute the City must either bond or lease; there is no middle ground in the statute that allows the City to “participate in the bonding”.

      My brief review of the documents suggests that building a less expensive building doesn’t help the City because the City has already committed itself to a lease payment based upon bond sale.

      It seems to me that the most prudent approach at this time is to get legal opinions on the alternatives and the legal consequences. The new council shouldn’t pay out a penny nor should it engage in any more planning for a new facility. We also need to look at the option of calling for a special election, encouraging a referendum, and possibly suing the old council. The new council will only have 1 councilor who voted in favor of this plan. So, a fresh and new look is warranted.

      The new council not only has the problem of fixing the current police station problem, but we have to consider if and how we want to limit ourselves and future councils for ever pulling these shenanigans again. If we simply try to make the best of a bad situation, there is nothing stopping future councils from doing this again.

  5. David –

    I’m sorry for my slow response, I was out of town for many days, helping my parents move.

    I greatly appreciate your interest in the details of the financing structure. It is certainly important to fully understand what the City can and cannot do regarding the design, construction, and operation of the facility.

    Perhaps you might conduct your own, informal, “referendum” of taxpayers’ views on a special election, referendum, or suing the old council. If, as at least three people who are part the new council have suggested, the train has left the station, that train will be a rollin’ down the track.

    Your belief that the process was wrong is valid, as is your concern that it not happen again. However, I do hope that the new council will work to assure that the train’s “destination” will be in the best interests of the community, despite the process to date.

  6. Ross,

    Do you have a vision or even a sense of what would be “in the best interests” of the community? Your post mentions putting together a team for a balanced and sustainable solution so that we don’t waste all of the time and talent that has already gone into the planning process. But, what does that really mean?

    As it presently stands, unless the new council is willing to slow down the train of the last council we will end up with a $7.2 million police station on the edge of town, with no help for the fire department. In addition, we will have set a dangerous precedent for future bonding (funding).

    In light of the fact that this council has done what it has done, what specifically can or should be done either by this council or the next council?

    1. David –

      I’m full of ideas…and probably beans too. However, on my good days I’m smart enough to ask a diverse group of wise people with a variety of experiences for their ideas on the “best”…or at least decent…plan.

      I’m less concerned about wasting the time and talent that has already been “invested” in this process; I’m more concerned about wasting more time and talent having the new Council sue the old Council. I think for most non-lawyers such a strategy sounds crazy.

      I appreciated your, and others’, candor at the candidate forum about not really knowing/understanding what we’ve gotten ourselves into with the funding. As I said in my previous comment, understanding the financing agreement is important for determining our next steps.

      Perhaps I lack your passion for righting past wrongs and preventing future wrongs. More importantly, maybe you’re right and our only hope for regaining control of the process is blowing up the current financing agreement. Who knows, maybe this detonation, including penalties, legal fees, and staff time, will cost us less than the $400,000 difference in interest cost.

      However, I’m not optimistic that the dynamiting of the train tracks will produce any more positive attitude within or productive outcome from the community than the previous process. And frankly David, when I look at the people on the new Council, I’m not sure I see the votes for pushing the plunger.

      Therefore, I am focusing my attention on plans and specs, the biddable documents, that will create the facility (and program) and generate the costs, both development and operating. I think we agree that the ultimate goal continues to be meeting the highest priority needs of the fire department, the police department, and the broader community of Northfield through an affordable and sustainable plan.

      Yeah, I’ve given up on achieving the only plan that made sense to me, the “new tires on an old car” plan (and the plan proposed back in Roder’s day) of addressing the original, allegedly critical, issue: adding a fire truck bay on the current site. I’m hoping we can perhaps still achieve the “Chevy” plan, a new fire barn on the land the City has apparently already bought, and that we can do it for $4 million or less, and pay back the unused bond proceeds.

      And I’m assuming as the renter of the building, we get a building that meets our specifications or we don’t move in and we don’t pay the rent. If all that was included in our “lease” was that drawing that was in the Council packet, the plans and specs are a blank slate.

      I’d suggest doing it Noah’s Ark-style, with a task force of two fire department folks, two police department folks, two city councilors, two (local, tax-paying) contractors, two (local, tax-paying) architects or developers, and two (local, tax-paying) building owners or building managers. That’s an even split between “users” and “funders”, which I think will help to produce an affordable and sustainable solution.

      The one piece for which I haven’t yet developed an idea…or experienced the action of a bean…is the appointment of task force members who aren’t already sold on the “party line” or project plan. As I suggested in my original post, I believe that a diversity of backgrounds and ideas is essential for an open, healthy, and truly innovative process.

    2. Ross,

      Your comment is an excellent, concise, and practical analysis. I will respond to each part of it as I have more time. In the meantime, I would really like to hear from other “diverse and wise” people on their thoughts of what could or should be done.

  7. I am very interested in exploring the true legality of what the city has done regarding financing the new police station. I think it is important for everyone to remember that just because a city or entity does something does not mean it is legal to do so. I’ve never heard of a city buying land and leasing it to another entity, who then builds a building and leases it to the city…all using some type of financial instrument that appears to be quasi-public.

    A story: When I was in the legislature the Northfield schools were exploring the idea of building an electric wind turbine. But as they looked, it became evident that the legislature had never granted schools the authority to own, operate or finance a wind turbine. I worked with Sen. Ellen Anderson and we passed legislation to allow schools some limited rights to own and operate a wind turbine. BUT, there were already two schools in Minnesota that were operating their own wind turbines! They sold bonds to build them and nothing was ever said about the fact that they didn’t have the authority to do so.
    Moral of the story: Not all that a public entity does is always legal or permitted.

    1. Ray,

      On behalf of a number of citizens and non-citizens, I have already explored the legality of the city council’s actions; I opined that the funding was illegal. That opinion was ignored by the council, staff, and the hired help.

      Once I am on the council, I can request that the city attorney and/or bond counsel authorize that this question be examined in detail. It would seem that doing so would be prudent.

      If the action was illegal or even questionable, it opens up many more options for the council, including the opportunity to have the question put before the voters.

  8. Ross,

    On the issue of the new council suing the old council:

    As a council official, I am uncomfortable moving forward on the new police station if the financing arrangement was illegal. Not only does it create personal anxieties, but, as an elected official I have a duty to the citizens to make sure that past acts, no matter how well-intentioned, don’t exceed the power of the government. Perhaps this council will be willing to do something less drastic – like calling for the election that could have been held in the first place.

    In addition, there is the problem that this action, if left unchallenged, will set a dangerous precedent, both legally and procedurally. For example, what if this new council wanted to spend $7.2 million to build infrastructure for a new business park, or $7.2 million for a library expansion, or $7.2 million to build a new Y? Is there any limit of these kinds of actions?

    Even if this action was technically legal, I think the voters have the right to have the spirit of the law upheld in the future. The spirit of the law is that local governments should not be able to assume debt for the citizens without the citizens having the opportunity to vote.

    Lastly, there is economic value to determining the legality of the action. If the action is determined to be illegal, then the city has options. Without the threat of illegality, the city may be stuck with the “Hummer” model.

    1. For the record, I am totally against any legal action by the new council, directed against the ‘old’ council. This is a totally non-productive path, IMO, and one that only results in more division and general rancor… to say nothing of a destroyed working relationship between the current and newly elected members.

      I also do not see this financing method as one that will necessarily be accessed in the future; this seemed to be a ‘last ditch’ effort on the part of some frustrated council members, and possibly prompted by staff( by that I mean that I don’t think council members stay up nights looking for obscure funding mechanisms.)

      I do agree, David, that large project expenditures that result in elevated tax burdens, should be approved by the voters… seems to me that is what representative gov’t is about.

      I hope the new council will make an optimum situation/project development out of what , in my mind, was a poor financing choice.

    2. Kiffi,

      Would you feel the same way if an independent third party, such as the League of Minnesota Cities or the Attorney General announced that it was illegal?

      1. That would certainly cause me more concern … and I don’t mean, David, to just discredit your opinion, but I find it difficult to believe the process was “illegal” with all the Ehlers bond counsels, attorneys for the bonding process, etc., that were involved in the contractural process.

        After all, they have their professional standards to adhere to ; why would Ehlers want to put themselves in a compromised position with their relationship as the city’s bond counsel?

        The process was certainly unfortunate with regard for the public’s vote, but as distasteful as it seems, I very much doubt that it was “illegal” in the sense you are referring to, i.e. as an un-allowable process for municipal financing.

      2. Kiffi,

        Play along with me. What if it is illegal? Then what?

        And, if I, as a representative of the people, don’t know whether it is legal or illegal am I not duty-bound to people to get a definitive opinion?

      3. OK … I’ll ‘play along’ …
        I don’t see the MN League of Cities as being the be-all/end-all opinion; actually I think there’s a bit too much weight given to that organization; but if the Attorney General’s office felt it was illegal, and wrote a defining opinion to that effect, that would be pretty serious.

        What I don’t get, is that you seem to think there is no current council member that has the ‘smarts’ to question what you think was an “illegal” process. I find that to be an incredible position for you to take;although I disagree with the path they chose, I do not think they are irresponsible … rather, IMO, made a poor judgement call.

      4. Kiffi,

        Let’s follow up on the question, “What if it were illegal?”. Given that any illegality would be serious, should the new Council ask for proof of legality? Should we ask for the results of the closed (secret) meeting on the legality?

        I called both the League of Minnesota Cities and the Attorney General to find out if it is legal. The League doesn’t give opinions, and the Attorney General no longer writes opinions upon request. However, there are some older Attorney General opinions right on point saying that it cannot be done. (The Attorney General is responsible for defending and/or interpreting state statute in the case of litigation.)

        I also called Ehlers (our financial folks) and Kennedy and Graven (our attorneys). Neither one would speak with me. I called the City’s civil attorney, Hood. He said that he would get a legal opinion stating that it was legal, but I never received one, and one was never published. In fact, after I talked with Hood, the City Council called the secret meeting.

        In a nutshell, what should be done about the possibility that this council acted beyond its statutory authority?

      5. David: if anyone newly elected to the council (that would be you) has a serious concern, with some basis for that concern (such as the “right on point” Attorney General’s opinion that you mention) then I think you have a right, and a responsibility, to ask for any and all information that you need to feel secure in your decision making… and that would include the tape of any closed meeting on the subject.

        This matter should be put to rest, so it does not become a festering issue in the community.

        P.S. I would think that once you are sworn in, Ehlers (bond counsel) and Kennedy and Graven(attorneys) would also have to answer any questions you have, to your satisfaction, wouldn’t they?

  9. David: The NFNews quotes Standard and Poor’s Rating Service as giving NF a “AA” bond rating, including specifically on the 2012B Certificates of Participation that are the financing mechanism for the Safety Center.

    Do you think Sand P would be giving the same rating as all the rest of the city’s bonding if they were not sure of the legality?
    Wouldn’t they downgrade all the rating, if financing were incorrectly done?

    1. Kiffi,

      As I understand the financing, the answers are, “Yes”, and “No”. S & P’s only job was give a rating.

      The uncertainty of the debt instrument (Certificate of Participation) is reflected in the higher interest rate being charged. (According to DeLong 2.85% here, 2.06 % in Fergus Falls.)(Note also the interest rate for the school in its refinancing – about 1%.)

      Certificates of Participation (as these things are being called) are the city’s promise to pay the lease payments for the term of the lease. Because state law prohibits councils from leasing for periods longer than one year without voter approval, the certificates are considered risky for investors. In other words, the bonds are not backed by the full faith and credit of the city. The city has to have the right to “default” on the lease payments.

      In the end, the risk of investment is borne by the holder of the bonds. However, if the city “defaults”, S&P will penalize the city by killing our credit rating, and treating the city as if the bonds were backed by the full faith and credit of the city.

      For the city, it is a lose/lose proposition. We pay higher interest rates because the voters didn’t vote, and, if there is a default, we are treated as if there was voter approval. For a uncertain project, like a ice arena, this kind of thing might make some sense. But, for a facility that is going to used by the police, we aren’t going to move out.

      1. David: I understand all the background you provide as explanation; I don’t think you very clearly answered my question re: S and P’s rating process… maybe I wasn’t clear enough…
        Why would S and P risk their own credibility by giving any rating, rather than a statement, if they felt the process they were asked to rate was illegal at any level?

        Or, to ask in yet another way: is not their rating a verification of the COP financing as being a valid method?

      2. Kiffi,

        S&P doesn’t care about the debt; it only rates the creditworthiness of the city. (For that rating, I think we paid them $11,000.00.)

  10. Kiffi –

    I’m not sure how much we should take from a Standard & Poor’s rating. After all, S & P gave Enron, mortgage-backed securities, and Greek government bonds triple-A ratings…just before all three investment opportunities crashed.

    I think S & P’s ratings are based more on the perceived strength of the category or industry, such as energy traders, collateralized debt obligations, sovereign debt, or municipal bonds…not Northfield’s Certificates of Participation.

  11. Ross and David … So then when the Council”crows” about the city’s bond rating, as they did last night … And as a matter of fact always do … That is meaningless, because the rating is meaningless?

    Is that what you are saying?

    If not, then what is the effective meaning of the S and P rating tothose issuing the bonds?

      1. So then … if , as you say: “S&P rates the quality of the debtor, not the debt.”, what would be injurious to the city’s bond rating would be a council calling into question the payment of a contracted for debt.

        ???

      2. Kiffi,

        What would be injurious to the bond rating is not paying the required lease payment. The Catch-22 is that these bonds are not technically Northfield bonds, but we have been told that Northfield’s bond credit rating will suffer if it doesn’t pay the lease payments so USBank can pay the bonds.

        So, we will be paying a higher interest rate but will be treated as if the bonds are backed by the full faith and credit of the city.

  12. Tonight at the City Council meeting, Councilor Ludescher will present a resolution to spend $4.5K to get a more clear/thorough analysis of the legality of the City’s process in financing the proposed Safety Center with Certificates of Participation.

    Bringing a resolution of this nature is not a disruptive action, but rather the process that the two new Councilors, Ludescher and DeLong, were advised to follow when they met with Administrator Madigan and Finance Director McBride.

    Regardless of the NFNews’s opinion in their recent editorial, if the Councilors feel they have questions to yet be answered, then they certainly have the right to pursue them to their satisfaction. One must take into consideration the election of these two persons, who had made their views on the SC financing process well known, before the election.

    Were those views a strong reason for their election at this time?
    If so, does that not support the public’s questions, and seeking to have questions answered through these two new councilors?

    Yes, there were bond counselors at the final financing meeting, and yes, they answered some questions, but not all … in my moderately well informed POV.

    Following on the NFNews editorial, there has been a string of comments, an argument one might say, primarily between an anonymous commenter selfnamed as “steakholder” (no, I didn’t spell it wrong; that’s the way it is presented) and Councilor Ludescher.

    As usual, when Mr. Ludescher’s POV is not accepted by the anonymous commenter, that person moves into an ‘ad hominem’ position, asserting “conflict of interest” , etc… going so far as to say this councilor should be barred from discussion of the subject.

    *** I do not believe Councilor Ludescher and Councilor DeLong have baseless concerns or questionable motives, any more than I believe the Councilors who voted for this financing method cast their affirmative vote for any reason but the desire to avoid a public referendum. ***

    ‘We’ elected all these people, and they have a right to do the job as they see fit; I do not think ‘we’ have any evidence to attribute scurrilous motives to either side … and I wish the anonymous commenters would allow the same attitude, without personal invective and general accusations.

    1. Well said, Kiffi. I don’t agree with David L. on everything, but on this issue, I certainly do. And I do think that questions over the financing of the safety center played a role in the recent election. The process the last council used seemed to me very sketchy–and it does not surprise me at all that lingering questions exist.

  13. The council did not approve the request to have an opinion on the legality of the process under state law or under the Northfield charter. They also did not approve the request to determine if we could refinance and save money on the financing.

    I received an estimate (from a CPA) that the city could save (could have saved?) over $0.5 MILLION if the council had put the matter out for a vote. If the city could refinance at the same interest rate that the school refinanced at we could save $1.3 MILLION. Both of these numbers are based upon the “Taj Mahal” plan.

  14. What was most disconcerting about the negativity of the council’s comments last night was the dichotomy of continuing to say they were looking for more cost cuts, but refusing to vote even for finding out how any money saved could be spent; also ignoring the possibility of saving by refinancing , as Councilor Ludescher suggested might be possible.

    If the refinancing plan C. Ludescher suggested is feasible, then this council has not served the public interest well by refusing to get a legal opinion on the possibility of saving from $500K to $1.5M. There was simply no expressed interest in that plan for savings, although it far exceeds the cost savings they have discussed on building features.

    To me, IMO, the reaction was adversarial … only Councilor Pownell thought a Councilor, any Councilor’s questions, deserve to be answered.
    And since C. Pownell is always ready to spend $$ (and I’m not saying that’s a bad thing) she made it clear that it was not the money but the principle of a councilor’s right to an answer to a substantial question.

  15. Oh good–another gridlocked council. Is there something in the water at City Hall that makes our councilors vacillate between treating one another crappily and rushing important issues past the voters?

    1. Maybe theyll get a new water cooler in the new $700K interior City Hall renovation, Kathie, and things will improve!

Leave a Reply