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Wednesday, May 22, 2024

Bids forthcoming on $20 million city bond

The $20 million revenue bond put out to market by the city of Windom to fund a new medical office building at Windom Area Health is receiving bids.

According to Todd Hagen, senior municipal advisor at Ehlhers, he expected three bids to come in before the weekend, but more are being sought and he does not believe the Windom City Council will have a successful bid to approve or reject at its council meeting this week.
He expects that either a special meeting will be called, or the council meeting on Oct. 3 will deliver the best financing package for the council to vote upon.

A pricing committee consisting of WAH Chief Financial Officer John Pereyl, Windom City Administrator Steve Nasby, and Windom Mayor Dominic Jones will decide on what they consider the best bond loan package to put forward to the city council.

Bond reserve required

Hagen had no interest rates or possible terms to report at this time. He did say that it looks like the banks will require a bond debt service fund as part of the loans, much the same as were required in a 2016 bond.

“That’s a good thing,” Hagen said. “And that money will come from the hospital’s cash reserves.”

The bond reserve fund serves to make sure the financiers collect money even if the revenues or payments from WAH fall short. In Ehler’s pre-sale report, the bond reserve is estimated to be about $1.6 million, which is enough money to make the bond repayments for about one year.

For more details on this story, please see the Sept. 20 edition of the Citizen.

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