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Bonds approved for Perham refuse burner expansion

By Tom Hintgen / East Ottertail Focus - The Otter Tail County Board of Commissioners on April 2 approved a resolution awarding the sale of $19.3 million in waste disposal revenue bonds to finance improvements to the refuse burner in Perham.

The burner, operated by Otter Tail County and three adjoining counties, is also referred to as the Perham Resource Recovery Facility.

The low bid of 3.22 percent came from Baird of Milwaukee, Wis. The county will pay bond investors over a 20-year period.

“To be under 3.25 percent is very good for Otter Tail County,” said Financial Advisor Mark Ruff of Ehlers and Associates out of Minneapolis.

Otter Tail County has retained Ehlers as its independent financial advisor for the sale of the bonds. Ehlers is therefore authorized to sell the bonds by private negotiation in accordance with Minnesota statutes.

The expansion will include the addition of a waste heat boiler as well as a facility to help separate out recyclable items. The facility’s solid-waste-processing capacity will be increased from 116 to 200 tons per day. The facility generates steam that is used by some businesses in Perham.

The state of Minnesota is a co-signer for the revenue bonds. The intended source of repayment on the bonds is the net available revenues generated by Otter Tail County’s waste disposal system, run in conjunction with adjoining counties.

“Standard and Poor’s has given Otter Tail County a very good credit rating (AA),” said Ruff.

“The rating agency also is impressed with the county’s 50 percent reserve target.”

The refuse burner is operated by the Prairie Lakes Municipal Solid Waste Authority through a joint powers agreement between Otter Tail, Becker, Todd and Wadena counties.

“Standard and Poor’s has the expectation that Otter Tail County will likely maintain strong financial reserves and balanced operations,” said Ruff. “County management has a willingness to raise its operating and debt service levies to meet budgeted expenses.”

The expansion of the Perham refuse burner will necessitate the addition of 12 employees.

Otter Tail County’s Solid Waste Director, Mike Hanan, said the expansion should be complete about mid-year 2014. After that will come six months of environmental compliance testing.

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