Waterloo may take on $18 million in bond debt - KWWL - Eastern Iowa Breaking News, Weather, Closings

Waterloo may take on $18 million in bond debt

Posted:
WATERLOO (KWWL) -

The Waterloo City Council will soon hold public hearings for around $18 million in general obligation bonds.  It may look like the city's taking on a lot of new debt, but there's more to the numbers than meets the eye.

The numbers are staggering.  The city of Waterloo wants to issue $8.6 million in general obligation bonds for "corporate purposes", for projects ranging from flood control to street repairs.  Monday's council agenda includes seven total bond requests, adding up to almost $18 million.  But as the city looks at adding debt, it's also paying off lots of existing bonds.

"We will pay off, in general obligation debt, about $8 million.  So out total debt load for the general purpose will be about the same before and after we issue this debt," said Michelle Weidner, Waterloo's Chief Financial Officer.

The only extra debt will come in paying for more than $4 million in upgrades to the city's sewer treatment system.

"That is to complete the disinfection project that we're being required to do by the EPA and Iowa Department of Natural Resources," Weidner said.

Right now, it doesn't look like additional rate hikes will be needed to pay for those improvements.

Finishing off the new bond requests, the city's looking to refinance $6.6 million of debt, taking advantage of historically low interest rates, which will save taxpayers big time.

"A couple hundred thousand dollars I believe.  So it will be substantial as it adds into the taxes over the years," said Weidner.

All in all, the bonding will be manageable debt that will help continue to fund much needed projects in the city.  In the long term, current low interest rates should make both refinancing and new bonds easier to pay off.  Bond rates are coming in as low as two percent, more than half of what they were just a few years ago. 

The city council is expected to set a public hearing date of May 29 for the bond funding.

Powered by Frankly