Grand Forks eligible for $15 million Bank of North Dakota loan
Grand Forks became eligible this week for a $15 million loan from the Bank of North Dakota, paving the way for financing a slew of city projects. City leaders say it's a prime opportunity to pay for work like expanding the city's wastewater syste...
Grand Forks became eligible this week for a $15 million loan from the Bank of North Dakota, paving the way for financing a slew of city projects.
City leaders say it's a prime opportunity to pay for work like expanding the city's wastewater system or for building portions of the city's future water treatment plant, especially in an economic climate in which state legislators appear less willing to spend on local infrastructure. Grand Forks City Council President Dana Sande said many infrastructure projects are crucially important for a city eyeing growth and working to attract industry.
"Our bond rating is fantastic. We can borrow money very inexpensively," he said. "But the money from the state is at an even better rate. I would take every nickel the state is going to loan us because the interest rate is the best we're going to get."
City Administrator Todd Feland agreed. For example, a 30-year bond from the city would likely sell at about 3.25 percent interest, while a 20-year bond sells at 2.75 percent. The loan, which has a 30-year maximum term, comes with a 2 percent interest rate.
Feland said work behind the loan has been years in the making, culminating with the formation of an infrastructure loan program by the state Legislature last year and Grand Forks' successful receipt of the loan itself.
Sande said he's a big proponent of accepting the money from the state, a decision Feland said he expects to present to city leaders within the month, along with a list of projects. But before spending any of the money, Sande said, he wants to make sure the city has a clear idea of where the revenue to pay that loan is going to come from.
Though Sande said one potential source might be city revenue, the loan once again raises the issue of a potential increase to Grand Forks' sales tax, which has been swirling for several months. A potential 0.75 percent jump in the tax could pay for more than $100 million in local infrastructure improvements in coming years.
Sande said he's a proponent of the tax, noting a long list of benefits that come with improvements around the city. For example, a 42nd Street railroad underpass would help emergency vehicles move more quickly through the area, and wastewater system expansion is increasingly important as industrial and residential construction continues in the area.
Though no concrete plans have been made, city leaders have said that if they do get a tax proposal together, it will likely come too late for a vote in June and would more likely head to a special election or the November ballot.
Whatever happens, Sande has underscored a clear plan has to be in place at multiple steps of the process, from a way to repay the loan to a definite list of projects for the tax-not to mention a date when the tax increase goes away.
"(It's) so we can show people what they're going to get for their money," he said.