City approves loan agreements for estimated $7.26 million capital projects

Multiple loan agreements were approved by the Newton City Council to pay for 2019 bond equipment and projects identified during the fiscal year 2019-20 budgeting process at an estimated to cost of more than $7.26 million.

Newton Mayor Mike Hansen opened a public hearing to review the loan agreements during the city council meeting Monday night, but the agenda item roused no discussions among the six council members. Many of the requested projects and equipment had already been acknowledged by the city council during separate fiscal year budget meetings and work sessions.

The proposed capital items were listed in the extended Newton City Council agenda and separated into five categories: essential purpose, general purpose, economic development support DMACC, economic development support Hotel Maytag and economic development support micro-grant program.

Essential purpose items contained $750,000 for the city’s D&D program funding (a top priority for Newton City Council members), $1.1 million for the traffic signal improvements project along First Avenue East/U.S. Highway 6 and $1.6 million for a regional stormwater detention pond/dirt relocation needed for future development, as well as other capital assets.

The total cost of the essential purpose equipment and projects is about $4,683,500, and the loan agreement was initially estimated to not exceed $5.265 million.

General purpose items contained $150,000 for renovating the site of the former manufactured gas plant and $261,000 for parking lot improvements, as well as equipment for Westwood Golf Course, fire station building improvements and roof repairs for the Newton Public Library, among other proposed undertakings.

The total cost of the general purpose equipment and projects is about $584,200, and the loan agreement was initially estimated to not exceed $655,000.

Economic development support for DMACC included $350,000 of funding for the college’s 28E agreement with the City of Newton and $300,000 to possibly relocate the city’s public works facilities, which is currently battling pipe issues. The total cost of the support for DMACC projects is approximately $650,000. The corresponding loan agreement was initially estimated to not exceed $745,000.

Economic development support for the Hotel Maytag rehabilitation included a $150,000 grant and a final project payment of $1.05 million, which totals $1.2 million. The loan agreement was initially estimated to not exceed $1.37 million. Economic development support for the city’s micro-grant program was estimated to be $150,000; likewise, its loan agreement was initially estimated to not exceed $350,000.

The estimated total of the five loan agreements is $8.385 million.

Newton City Administrator Matt Muckler said many of the items included on the 2019 bond equipment and projects list are directly connected to the 2018-20 Newton City Council Goals. Others signal the upcoming completion of projects such as the former Hotel Maytag building, now known as Historic Hotel Maytag Apartments & Event Center.

“This is the last installment of that project,” Muckler told the Newton Daily News Tuesday afternoon. “We’ve got the traffic signals downtown. The D&D (funding) was the No. 1 goal of the city council for the coming year. Another one of our top goals was to continue single-family home development.”

Upon closing the public hearing, council members voted 6-0 to approve the ensuing resolution to take further action regarding 2019 bonds and combining the five separate loan agreements into two, which are identified as the Series 2019A Loan Agreement and the Series 2019B Loan Agreement — the amounts of which are not to exceed $4.46 million and approximately $3.13 million, respectively.

When separated into two loan agreements, the estimated total would change to $7.595 million. Muckler said the total preliminary amount for the loan agreements, costs of issuance of the bonds and capitalized interest is $7,736,703.

“A lot of it is driven by bad or needed capital equipment that we need to take care of our parks, cemeteries, golf course (and other facilities),” he said.

Contact Christopher Braunschweig at 641-792-3121 ext. 6560 or cbraunschweig@newtondailynews.com