News Column

Waterloo to borrow $11.5 million to finish public works building, other projects

May 17, 2014

By Tim Jamison, Waterloo-Cedar Falls Courier, Iowa

May 17--WATERLOO -- The city's long-term debt has hovered around $95 million for the past decade.

But Chief Financial Officer Michelle Weidner said costly sewer projects and economic development initiatives like Cedar Valley TechWorks are expected to begin pushing the bonded debt higher.

The comments came Monday as City Council members voted 6-0 to approve a list of projects to be funded with some $11.5 million in general obligation bonds slated to be sold June 4.

Bond buyers give the city money to pay for capital projects, including fire trucks, building renovations, park improvements and bridge repairs. The city uses property taxes and sewer funds to pay off those bonds with interest, traditionally over 15 years.

While the city over the past 10 years has been selling roughly the same amount of bonds as it has been paying off in a given year, the sewer and economic development projects could make that impossible.

The June 4 bond issue includes $8 million in new debt for traditional city projects, with the largest next year being close to $1 million to complete and equp the new Public Works Building at the former Construction Machinery Co. site at Vinton and Glenwood streets.

Other large expenses include $550,000 for a new fire engine, $650,000 to buy and demolish downtown buildings for redevelopment and $430,000 for Logan Avenue tax increment financing district projects.

The city is also planning to issue $3.5 million in bonds to do site work and parking lot improvements at the Cedar Valley TechWorks campus on Westfield Avenue. Additional bonds have already been authorized for sale for additional TechWorks projects when they're ready to move ahead.

Another $4 million in bonds for sewer improvements have been approved for sale later but are not expected to be part of the June 4 issuance.

Resident John Sherbon, who spoke during public hearings on the bond issues, was more concerned about the smaller expenses on the list: police cars, fire uniforms, building maintenance.

"There's a ton of this stuff," said Sherbon, suggesting some of those items will be worn out before the bonds are paid off. "Our bond money should probably be held for the bigger projects."

Weidner countered the uniforms are actually protective gear which does last for long periods of time. And she said the city attempts to schedule bond maturities to match equipment lifespans.

"We try very hard not to do routine maintenance" with bonds, she said.

Along with the new bonds, the city is planning to sell about $15 million in refunding bonds, which is actually projected to save the city about $500,000 in future interest costs.

"That is just like refinancing your home mortgage to get a better interest rate," Weidner said.


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Source: Waterloo-Cedar Falls Courier (IA)

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