Names to numbers

Ashley Smith · Wednesday, April 12, 2017
The West Liberty city council talked numbers Tuesday, April 4. It began by setting a public hearing for April 18 to approve the official preliminary statement on a loan agreement.

According to the proposed agreement, the loan will not exceed $2,200,000 and is purposed for “construction street, water system, sanitary sewer system and storm water improvements.”

While the language in the resolution announcement may sound vague, the money will be used for the Maxson Avenue Improvement project, said Michael Hart, Vice President of Public Finance at Northland Securities.

“If we don’t specifically say that it is only for Maxson, then at the end of the bond issue if you have money left over, you have flexibility with how you use that,” said Hart. “You could use it for any of these purposes listed.”

According to Hart, this approach is standard practice, and the actual bond document the city receives will list Maxson Avenue as the primary purpose for the loan.

If the loan agreement is approved on April 18, Northland will submit a bond proposal and firm interest rate at the council meeting on May 2.

“Then we would send those numbers to your attorneys, and they would put that into a resolution that you would have for approval on May 16,” explained Hart. “The city would actually receive the funds on June 1.”

The city will apply for a non-rated bond issue. West Liberty’s rating from Standard and Poor’s dropped to BBB+ following audit of the fiscal year ending June 2013. While the city’s rating is steadily improving, it is not likely to be high enough for a rated bond issue.

Hart is optimistic, however, about the city’s financial future.

“I just looked at your audit, it’s significantly improved financially from where you’ve been. You’re on that path,” said Hart. “As you look at the city’s overall debt, you’ve done a lot in the last few years.”

In a few more years, the city may have a rating favorable enough for a rated bond issue, said Hart.

The council also approved several bids for equipment for the Municipal Electric Utility Switchgear and Transformer Project.

According to Hart, some of the equipment will require a down payment before it can be ordered. Thanks to the city’s growing electric utility balance, the down payments will be no problem.

City Manager Lawrence McNaul recognized the city’s achievements in improving its financial standing, but cautioned against too much future spending.

“We’ve been very good up to this point, and even though we’re getting our cash reserves built up, it’s still advantageous for us not to get that disease of wanting to spend it,” said McNaul.

“We can hold out and get our bond rating reestablished,” he said. “After this Maxson project, we need to take a good year, year and a half just to recoup all the projects.”

Other items of business at Tuesday’s meeting included the approval of operating procedures for the West Liberty Downtown Task Force and Muscatine County Historic Preservation Commission Joint Committee.

Council member Melody Russell explained that the new procedures require the committee to seek council approval for expenditures over $5,000.

“We want to make sure there’s oversight for larger projects,” said Russell.

McNaul echoed the necessity for operating procedures that involve city council for major expenditures. “It’s important because this is a mayor’s taskforce. This is a city committee,” he said.

The council reviewed the city’s recent audit, but tabled its approval after finding some discrepancies in the government activity spending listed.

Issues with water drainage represented much of the meeting’s miscellaneous business. Council members reported constituents’ concerns, including water retention on Maxson Avenue near Simpson Memorial Home, as well as overgrowth in a ditch on the west side of Garfield Avenue.

Improvements in road pavement were also discussed, but they will take a backseat to the Maxson project, said McNaul. “There are several that are pretty bad, but Maxson’s been our project right now,” he said.

A broken valve mechanism on the water service line at 408 N. Columbus has resulted in termination of water utility service, but is complicated by the fact that the line runs through the basement of an adjacent property.

The service line predates known city records, but a previous owner may have once owned both properties.

While city law requires all houses, buildings or properties used for human occupancy to have utility connections, the city cannot enter into a civil dispute between property owners.

“We can turn the water back on when the line is either fixed or moved,” said McNaul. The item died for lack of motion.

Kelly Daufeldt was appointed to the county position on the West Liberty Public Library board.

The city interrupted a contractor planning to install a cellphone tower in the right-of-way between the sidewalk and curb on Spencer street. The proposed structure is 127 feet tall, and would outsize the West Liberty water tower.

“I hope it was a miscommunication,” said McNaul. The structure would need to be constructed in an alternate location, he said.

“Nowhere have I received anything from the Iowa Utilities Board about building a structure in the right-of-way. It’s on hold right now and I’ll have further conversations with them later this week,” he said. “If we have to engage attorney services, we will.”
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