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City will sell bonds for key projects

April 3, 2024

The City Council of Webster City, at its first meeting of April on Monday evening, began the years-long process of paying for necessary upgrades to local electrical and water utilities with a proposed series of new municipal bonds.

A smaller bond issue, using projected sales tax collection for backing, might be used to fund an expanded local street repair program in 2024, and a General Obligation (G.O.) bond is the most likely means of paying for a new HVAC system at city hall.

The cherry on the top, and it was a sweet, not sour cherry, was a lowering of the property tax levy by $1.61 per $1,000 of assessed value.

Speaking of the lower taxes, which will save the owner of a hypothetical home worth $100,000 about $12, Interim City Manager John Harrenstein said, “Each year, every department of city government takes steps to accomplish the strategic goals of City Council. This year, part of Council’s guidance to us was to be mindful of the impact of increased costs being absorbed by businesses and residents alike.

“After looking carefully at our finances, and after a lot of work by Finance Director Dodie Wolfgram, we’re able to deliver a reduction to the basic levy. It’s a celebration for the public.”

Three public hearings set

The Council unanimously approved the scheduling of three separate public hearings to be held at City Hall.

All will take place Monday, April 15, beginning at 6.05 p.m.

The first hearing concerns the city’s intention to enter into an electric revenue loan agreement (in other words, an issuance of new bonds) to pay for various upgrades and new construction in conjunction with the city’s electrical utility. The bonds issued are not to exceed $8.835 million. Of this amount, $2 million will be used to pay for new Advanced Metering Infrastructure (AMI) electric meters for every household in Webster City.

Essentially, these are “smart” meters which have two-way communications capability between the meter and the electric utility. The meters regularly record hourly, or more frequent, consumption data and send it to the electric utility office, eliminating the need for physical, onsite meter reading. In some cities, AMI meters have been used to automatically apply different rates for electricity used at different times of day, allowing consumers to potentially save money on utility bills by changing their consumption patterns.

Also included in the electrical utility bonding is $4.3 million to pay the city’s share for construction of the new Reisner Electrical Substation in the industrial park in southern Webster City. This is approximately 58% of the substation’s projected cost. The remaining 42% will be paid for by Corn Belt Electric Co-Op, electricity generation and transmission supplier to the city.

A second hearing is concerned with allowing the city to enter into a water revenue loan agreement (more new general obligation bonds) in an amount not to exceed $5.395 million. Funds raised from these bonds will be used to upgrade the existing soda-ash water treatment plant to ensure it remains operable while the city builds a proposed $79 million wastewater treatment plant. Building, and paying for, new wastewater and water treatment plants simultaneously has been previously judged by both city staff and the City Council as inadvisable.

As part of the issuing of both the electrical and water utility bonds, the city seeks to employ Dorsey & Whitney LLP, attorneys, of Des Moines, to represent it in matters pertaining to the bonding process, and ensure regulatory compliance. Dorsey & Whitney will be responsible for preparation of regulations, notices, agreements, filings and certificates, consult with the city’s municipal advisors (PFM Financial Advisors, also of Des Moines), and deliver an opinion that any bonds issued are valid and binding general obligations of the city, and that interest paid on the bonds will be excluded from gross income for federal tax purposes. For this service, the city will pay Dorsey an estimated $35,000 in fees for the electrical utility, and an estimated $31,500 in fees for the water utility bonding work.

The third public hearing will be held to discuss the city’s proposed fiscal year 2025 budget and five-year capital plan.

The newly-approved budget estimates $4,838,868 will be raised from property taxes, 29.88% of all revenue flowing into the general fund. The largest source of income for the city, money collected for electrical and water utility service, accounts for 50.45% of total revenue.

In round numbers, 45% of the city’s income is spent for general use, the largest portion funding the operation of several city government departments; about 25% goes for employee benefits; 23% to pay off the city’s existing debt; 4% to cover insurance premiums; and 1.46% to operate the Webster City Municipal Airport.

The five-year capital plan, as it stands today, recommends the city purchase trucks, unspecified “heavy equipment,” a new street sweeper, mowers, new police vehicles, in-car cameras for the police vehicles, a trailer, unspecified information technology equipment, radios and pagers. Also included is a new tanker and pumper truck for the Webster City Fire Department, but no source has yet been identified to pay for them.

In other action on Monday evening, the City Council unanimously passed a resolution authorizing “parklets” in downtown Webster City, from May 1 through October 31, 2024.

Last summer, on the Webster City Area Chamber of Commerce Market Nights, several downtown merchants used parking spaces on Second Street immediately in front of their place of business to set up tables and chairs and serve food and drink outdoors.

Mayor John Hawkins explained: “This resolution will make it possible for businesses within the downtown Self-Supported Municipal Improvement District (SSMID) to set up these temporary facilities and leave them in place throughout the season, instead of needing to set up and dismantle them every day.”

Councilman Logan Welch said, “It’s a great idea.”

Matt McKinney, another council member agreed, saying: “This is a popular amenity in other towns allowing people to sit outside and enjoy the atmosphere during the warm weather months.”

In other business, a resolution, passed unanimously, accepts as complete the work done at Wilson Brewer Historic Park by Habhab Construction, including earthwork, topsoil stripping, stockpiling and spreading, seeding and fertilizing near the new paved parking spaces and along the recreational trail extension. Added to the original budget were three change orders totaling $14,015.57. The improvements were designed and overseen by Schlotfeld Engineering, Webster City, and paid for through the Enhance Hamilton County Foundation Wilson Brewer Park Fund charitable donations.

Finally, it was agreed that Friday, June 7, and Saturday, June 8, will be the dates for the city’s annual Clean-up/Drop-off event. Hours will be from noon to 4 p.m. on Friday, and from 8 a.m. to noon on Saturday.


View this article as it originally appeared in the Daily Freeman-Journal.


Last modified: April 3, 2024

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