The Newton City Council passed a resolution setting May 5 for a public hearing on the proposed issuance of three bonds not to exceed a total of $2,510,000. The May 5 meeting day gives the council an opportunity to set May 19 as the sale day of the bonds.
Two of the three bonds are for essential corporate purposes, which value a total of $1,020,000. The third bond is for urban renewal process. The bonds are valued at $1,490,000 with a $30,000 issuance cost included.
During the Jan. 27 budget workshop, city council gave its consensus direction to move forward with the process for issuing bonds for several upcoming projects. The public hearing process has been completed for the Housing Initiative and general project components of the bonding, but it remains for two other portions: TIF funded projects and refinancing of previous bonds.
The projects that the city council has discussed are slated to be funded by tax increment finance districts. This funding mechanism would not add anything to the Newton debt service levy, as the TIF districts would cover all of the costs.
The proposed projects would be as follows:
• North Fourth Avenue Roadway Rehabilitation: $530,000
• Extension of Sanitary Sewer Main along East 31st St. N.: $270,000
• North Second Avenue West Roadway Asphalt Overlay: $220,000
• Newton Senior Housing (Miller-Valentine) Grant: $150,000
• City of Newton Manufactured Gas Plant Environmental Clean-up: $100,000
• Demolition of City Water Works Garage Building: $90,000
• Downtown Design Concept (Traffic Patterns, Parking, Streetscape): $50,000
• Lining of Sanitary Sewer Pipe along North Side of DMACC: $35,000
• Portion of NE Beltline Roadway Rehabilitation: $15,000
The city plans to be bonding this spring, as it is an ideal time to identify opportunities to refinance past bonds that can be grouped into the new issuance at lower interest rates.
Analysis by the city’s bond advisor, Chip Schultz of Ruan Securities, indicated two opportunities to save money on past bonds: the city’s 2007A and 2009A series. The 2007 refinancing would be for $440,000 and the 2009 refinancing would be for $580,000.
The bonds would still have the same end date as they currently do, and the refinancing is projected to save the city $70,000 over the remaining years of the bonds. These savings would be realized by TIF districts, as those are the current source of the funding of the payments on these issuances.
“It’s great to know we will be saving money on the sale of these bonds,” councilor Noreen Otto said.
Staff writer Zach Johnson may be contacted at (641) 792-3121, ext. 425, or at zjohnson@newtondailynews.com.