By Sara Strong
The Luverne City Council is accepting bids for bonds to help decrease future interest cost and to help pay for firefighter retirements.
A financial adviser attended Monday's council meeting to recommend the city advertise for several bonds.
In the case of fire relief, or the firefighter pension, the city is obligated to pay $1,900 a year for each year the firefighter has been a member of the department. That lump sum payment adds up significantly when a few 20-year veterans retire at once, so additional money is needed.
As it stands, the city will probably issue a $560,000 bond to go to the relief fund. Using a bond helps the city fund it without adding to the general levy, which has a state imposed limit. But the city still pays for it either way.
Essentially, the fire relief fund has $1 million costs and has half that in assets, so the bond will make up the difference.
The fire relief fund has been shrinking because of a poor economy that didn't help investments and because of increasing pension payments.
Retiring firefighters get $1,900 per year of service. That amount has increased through the years from $600 per year of service in 1989.
On the three other bonds that the city is considering "refinancing," about $183,000 in interest can be saved over the life of repaying the bonds.
The bids will be opened Nov. 12, and can be rejected if the city isnÕt pleased with the rates offered.