Although the loan does not belong to the city itself, the Dyersville City Council did extend its tax-exempt status privileges to the Ellen Kennedy Living Center for them to get a better deal on the refinancing of an older bond.
The original $5,500,000 bond taken out in 2001 by the Ellen Kennedy Center had a maturity date of October 2027 and included an adjustable rate, but when offered the chance to essentially refinance the $1,493,979 remaining on the bond at a 2.594% interest rate, representatives of the Ellen Kennedy Living Center wished to pursue the opportunity but first needed to go through the council for tax purposes.
While the council did unanimously approve the terms of the agreement, it is important to note that the city and the taxpayers do not have any stake in the deal — it will be solely the responsibility of the borrower to pay the bond back and cover any expenses related to the refinance.
Each calendar year under state code, the city has the ability to issue up to $10 million in tax bond capability. Recently, the council did issue $2.8 million in tax-exempt bonds, but City Administrator Mick Michel explained the city is still sitting comfortably in its ability to bond more tax-exempt money if needed, but that is unlikely to happen again before 2022.
“We are still well under the $10 million and we are not looking to issue any more tax-exempt bonds this year,” Michel said. “For a non-profit, this is a good deal and a way for them to save some dollars by reissuing this bond.”
The council also received a memo from Public Works Director John Wandsnider stating the city has accepted a bid from Eastern Iowa Excavating and Concrete of Cascade to complete the sidewalk project at the City Square.
Previously, the council had passed a resolution approving funding for the project, but it included language that would allow Mayor Jim Heavens the ability to approve the contract on his own as long as it wasn’t more than 2% over the engineer’s estimate to expedite the project.
After receiving a total of three bids, Eastern Iowa was the lowest offering with $131,756 for a Fall 2021 completion and $135,265 for a Spring 2022 completion, which was 3.1% under the engineer’s estimate of $136,000.
Wandsnider had recommended the council give bidders the option of a fall or spring timeframe to get better pricing, but he said he was a bit surprised that the fall bid came in lower than the spring.
Wandsnider said contractors had relayed to him that with the uncertainty of the future price of materials next year, they were more comfortable getting it done in the fall while costs are more stable.
The project is expected to get underway within the next week, and if the weather cooperates, they could even get grass seeded yet this year.