Newton City Administrator Bob Knabel gave a presentation on the 2015 Bond Issue to the City Council Monday. He began by reviewing the franchise fee, which after much discussion the council decided against.
During the past year, the council has considered various funding sources to address infrastructure needs. The initial focus was to use a franchise fee, which was estimated to generate $700,000 per year, Knabel said. The fee would also be a sustainable revenue stream for streets, equipment and major projects. The council ultimately decided not to use the franchise fee, but instead requested bond issues to be used.
“It has been the history of the city in the past to use bond issues for streets, equipment, those large items,” Knabel said.
There are three initiatives that total $6,946,200 with two of the initiatives impacting the general debt service levy.
The total going toward the levy would be $4,946,200 because the second initiative for downtown in the amount of $2,000,000 will be paid for with TIF money.
The first is the infrastructure and equipment initiative — including warning sirens, a fire department engine, park restroom and upgrades to Aurora and Sunset Parks, golf mower, irrigation system and clubhouse design among many other items. The total needed for that initiative is $2,946,200.
The city council approved the amount, based on a 10-year bond issue, averaging approximately $.70/$1,000 assessed valuation. The 2015-2016 Debt Service Levy is $1.50/$1,000 assessed valuation and will increase to a peak of $1.62 in 2017-2018. Based on the peak levy, the rate would increase from $1.62 to $2.10 with the addition of the $2,946,200.
A project that is included in the bond issue but will not increase the amount of the general debt service levy is the downtown TIF initiative. About $1,500,000 of the $2,000,000 will go toward improvements to South Second Avenue stretching from West Fourth Street to East Fourth Street. The remainder of the money is set aside for parking lot lighting, development initiatives and facade grants and loans in downtown.
The final economic initiative costs $2,000,000 and will impact the general debt service levy. Knabel recommends for the First Avenue Initiative, costing $1,000,000, to commit to improving the entrances, implementing a “commercial D&D” and providing redevelopment incentives and initiatives.
Also in the economic initiative is a focus on the interchange corridors at mile markers 164 and 168 on Interstate 80. At the cost of $1,000,000, Knabel again recommends using a “commercial D&D” program to buy buildings, demolish them and make the property available for commercial development. He also suggests focusing on expanding Newton’s retail, hotel and restaurant amenities at both of the locations.
“Driving in to either end of our town, the town is so much better than it’s entrances. I think that visual and that connection is highly important,” Council Member Lin Chape said.
Council Member Craig Trotter agreed with Chape that the entrances were a priority and both council members requested to see a timeline for the money that was allocated.
“Obviously this is not a two or three year deal, it is a long term investment in our community,” Mayor Mike Hansen said.
Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or jpierson@newtondailynews.com