Ham Lake is leery of refinancing debt to save interest costs

Anoka County voted to go ahead with Ramsey bond refinancing after Ham Lake balked at a chance to save thousands of dollars.

By PAUL LEVY, Star Tribune

Last update: May 27, 2008 - 8:51 PM

Refinancing senior housing projects in Ramsey and Ham Lake could save hundreds of thousands of dollars for both Anoka County cities, county officials said Tuesday. But Ham Lake remained unconvinced.

Asking how Ham Lake could stall when offered a chance to save "a half-million in this economy," Commissioner Dan Erhart led the County Board in passing a resolution approving the refinancing of housing development bonds through the county for Ramsey only.

If Ham Lake doesn't opt within a month to refinance the debt on the Willows complex, the city would be charged a $50,000 fee to issue bonds if it later chose to refinance, Erhart suggested to the board.

With its refinancing, Ramsey could save an estimated $40,000 a year for the next 18 years, county officials said. The principal amount of bonds authorized by the county for both cities combined was set at a maximum of $6.2 million, and the interest rate is capped at 4.5 percent.

Clearly frustrated by Ham Lake's indecisiveness, Erhart said he couldn't begin to "explain why the [Ham Lake] City Council is making the decisions they are."

"We are very cautious," explained Ham Lake council member Julie Braastad. "We do our research. We don't just jump on the bandwagon. We look at ourselves as being unique."

Ham Lake may have balked at saving hundreds of thousands of dollars over the next several years if it means paying a couple hundred thousand dollars right now, Braastad said.

The city put up $241,000 for its senior housing project financing initially and has been asked by the county to place an additional $200,000 down, Braastad said.

She said city officials don't want all of that money going into the senior housing project, preferring to keep funds in reserve for people with septic problems or other common emergencies.

Mayor Paul Meunier agreed, saying the city wants funds available should problems arise.

But he added, "If we have a chance to help our general budget, we need to take advantage of that."

The issue was expected to come up at a special Ham Lake council meeting that was scheduled for Tuesday night.

Paul Levy • 612-673-4419

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