City moves to borrow $2.5 million
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At their regular meeting Monday, October 21, the Mount Ayr city council took the next step toward borrowing up to $2.5 million in general obligation bonds for use in upcoming infrastructure projects.
Michael Maloney of the financial services firm of D.A. Davidson met with the council to clarify the bonding process and further explain how Tax Incremental Financing (TIF) can be used to fund projects in the city’s new urban renewal area.
The urban renewal area is bordered roughly on the north by Highway 2, on the west at Fillmore Street, on the east at the city airport, and on the south along the south city limits and extending to an additional parcel of land south of the golf course to 240th Street.
Currently the city can receive approximately $46,000 per year in TIF dollars, generated primarily from the newly constructed Casey’s General Store located within the urban renewal area. As more businesses are located in the renewal area, the more dollars the city can receive in TIF funding.
Maloney explained TIF money could be used only for identified projects located within the urban renewal area. However, he added the money could be used on one project or all projects within the area.
At a previous meeting the council had already identified a $1.5 million street project and a $510,000 storm sewer improvement project eligible for TIF financing.
Maloney explained financing for the street project could be spread over 20 years by using a combination of TIF, road use tax and debt service levy funding.
The storm sewer project could be repaid over 20 years through TIF and debt service levy funding.
Debt for a $164,600 airport improvement project could be retired in five years using funds from the debt service levy.
A separate $400,000 street project could be retired in four years using road use tax and debt service levy funding.
Other business
In other business the council:
• appointed Kurt Wallace to fill a vacancy on the city board of adjustment.
• heard from fire chief Mike Wimer that the new fire truck has arrived and is currently being outfitted. He suggested the city consider donating the replaced 1991 fire truck to a neighboring municipality, but action on the disposal of the old truck was postponed until the November 4 council meeting.
• discussed with Daniel Leonard options to hooking his new home on West Street to the city sewer. Because of elevation, Leonard’s property will require the installation of a lift station. He asked the council to consider some cost-sharing agreement similar to ones that had been granted in the past to cover some of the costs of installation of the lift station. The council will prepare an agreement for presentation at the November 4 meeting.
• approved pay requests for work on the water piping project from Crain Construction for $39,104.85 and from Poe Construction for $75,343.74.
• approved drawdowns amounting to $25,981 from the CDBG grant and $116,773.71 from the State Revolving Fund to cover the pay requests and associated engineering fees.
• heard an estimate from city superintendent Brent Wise of $37,000 to re-electrify the street lights along Shellway Drive. Wise said he was dissatisfied with the estimate and would continue to research ways to complete the project for less cost. The project would use the existing light structures but would completely rewire the entire system.
