City follows the money

Ashley Smith · Wednesday, October 11, 2017
Lisa Wertzbaugher of the West Liberty Downtown Task Force presented the city’s Community Development Block Grant (CDBG) application to council members on Oct. 3.

Wertzbaugher explained that the CDBG is a two-step process.

“First you have to apply for the grant, typically a 7 month process. The second phase is once you get the grant, you have to administer it – managing the funds, reporting back to the government, making sure the project is getting done,” said Wertzbaugher.

The state highly recommends that applicants hire an experienced firm to write applications for the CDBG, she said.

“We really wanted to hire the same firm to write the application and then the same firm to administer the grant – it impacts how well our application is written. We talked with the state and they said it would be a good idea,” she said.

After a bidding process, Wertzbaugher said WeLead and the Downtown Task Force decided to accept the proposal from HBK Engineering in Iowa City.

“This proposal was financially competitive, and this firm has a track record of applying for the grant. The last thing you want to do is to hire someone and not get the grant,” said Wertzbaugher.

Wertzbaugher said the firm’s fee for completing the application and administering the grant is about $14,000.

“We have roughly over $10,000 raised already, so we’ll have to raise another $4,000 before April,” she said. “Our plan is to apply by April 2018. We think we’re well positioned to do this project.”

Michael Hart of Northland Securities presented the council with a plan for over $4.2 million in electric revenue bonds.

Hart explained that bonds will be sold and interested rates locked in at the next council meeting. The city is in a strong financial standing and ready to afford electric improvement projects, he said.

“A couple years ago the city made a pretty significant change to the rate structure in the electrical utility. It set you up for success to be able to feasibly afford the projects that you’re looking at,” said Hart. “It’s payable solely from the revenue that’s generated from the utility.”

The 12 year loan agreement will include a reserve fund of $416,000, set up from the cash reserve of the City’s current bond issue, which will be paid off in December.

Hart explained that although the city has started to purchase components for electrical upgrade projects, it hasn’t received any bids from contractors to install the new electrical equipment.

“You didn’t receive any bids related to the work – a lot of it we think is because of the work going on in Texas and Florida with the hurricanes,” said Hart, indicating that many contractors are currently busy with rebuilding structures in the wake of recent hurricane damage.

Without a bid accepted yet for the project, the city could risk borrowing too much or too little money in this loan agreement, explained Hart. “There could be a risk of a bid coming in too high or too low – but once the bonds are sold, you’re on a fixed payment schedule,” he said.

The city will use an estimate from an engineering firm to estimate how much bonds to borrow, said City Manager Lawrence McNaul.

“It’s not a project we can walk away from – we already bought a transformer and it’s going to need to be installed,” said McNaul.

“The original bid was for the transformer and the site preparation. I asked them to send just the concrete and site preparation bid, and push that out next week, since we have two very reputable concrete companies in the area,” he said. “This buys us the time that we’re looking for.”

McNaul said he expected contractors who can install the transformer will become available soon, as they begin to complete their current projects in Texas and Florida.

Cliff McFerren of Simpson Memorial Home expressed concern with the Maxson Street repair plans for the water line near the nursing home.

“If there might be a boil alert, which would be a huge inconvenience for everyone involved – how much of this can we preplan? What can be done ahead of time?” asked McFerren.

“I need to let my board of directors know what to plan for,” he said.

The only way to avoid a boil advisory when replacing the water line would involve installing two Inserta valves, said city engineer Leo Foley.

“It’s a very expensive valve, and we’d need two, which is about $20,000,” said Foley.

Water Superintendent George Pearl estimated that if Inserta valves are not used, a boil advisory could be in place for 7 to 8 days.

“The boil order isn’t an order, it’s an advisory,” he said. “It’s fine for bathing and some cities use it for cooking. For drinking, they recommend it be boiled first, then cooled down to temperature.”

The city will work with the nursing home on creating a plan for how and when to replace the water line, which will take place next spring, said Pearl.

Mayor Robert Hartman reminded council members that the last two weeks of October are the fall open burning session, and the council unanimously passed a Class C Liquor License for Puebla Mexican Restaurant.

The council held a second reading of amendments to the West Liberty City Code to increase water and sewer service charges, and voted unanimously to wave the third reading of the ordinance.

Virginia Miehe and Aly Beal Henderson were appointed to the Library Board. A work session was scheduled for 6:15 pm on October 17 at the Waste Water Treatment Plant.
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