Grand Forks to get $15 Mil in Development at 2% Interest, Thanks to Bank of North Dakota

While cities around the country are going broke--a result of their reliance on big private Wall Street banks, high-interest and risky financing schemes, and overreliance on unpopular (and often regressive) taxation, Grand Forks, North Dakota, is smiling today.

Why? Here's Sam Easter of the Grand Forks Herald to explain

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.

"Our bond rating is fantastic. We can borrow money very inexpensively," [Grand Forks City Council President Dana Sande] 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."

...

The loan, which has a 30-year maximum term, comes with a 2 percent interest rate.

This news comes at a time when a few (not many) naysayers are implying that things aren't going well for the BND, the only public bank in the country. The state has had to cut its budget and its revenue projections because of rapidly slipping oil prices. 

But because of the BND, the state actually has surplus to tap into--they're grabbing almost $500 million from a "stabilization fund" that other states wish they had. Additionally

North Dakota has a sizable financial cushion. The state will have about $875 million in surplus cash in various reserve accounts, according to Pam Sharp, the state’s budget director. That doesn’t include the oil tax-funded “Legacy Fund,” which holds more than $3.5 billion. 

bank-of-north-dakota.jpgHard times are relative when you have a public bank. Grand Forks is the latest city in the state to feel the effects of a government's ability to leverage its power for the generation of resources and credit where it's necessary, even in relatively tough times. And when North Dakota decides to accept the inevitable decline of fossil fuels and truly diversify its economy, the BND will be there to help it finance business, development, infrastructure, and education for a new economy.

While cities around the country are going broke--a result of their reliance on big private Wall Street banks, high-interest and risky financing schemes, and overreliance on unpopular (and often regressive) taxation, Grand Forks, North Dakota, is smiling today.


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