(Red Oak) — Red Oak city officials have taken the first step in pursuing potential financing for a proposed housing subdivision and an upgrade for the fire department.
Meeting in regular session Monday night, the Red Oak City Council set a public hearing for its December 4th meeting on entering into a general obligation loan agreement to borrow no more than $3.7 million. Chip Schultz is with Northland Public Finance and has been providing guidance for the counsel on financing options for the StudioOne Townhomes project, proposed on the north side of town. Schultz says the potential financing would cover various items for that proposed housing project and a new pumper truck for the fire department.
“That covers the broken down infrastructure costs for both phases of the housing project, it includes estimates for engineering, construction, and administration,” said Schultz. “Then it assumes the fire department pumper truck at a cost of $1 million.”
Plans call for the construction of 33 townhomes in phase one of the project located near 4th Street and Ratliff Road. Additionally, as part of an application for a workforce housing tax credit through the state, the city has pledged over $1.2 million to fund the addition of the necessary public infrastructure. However, based on JEO Engineering Service estimates for the city’s portion and the cost of the pumper truck, Schultz notes the city would have roughly a $430,000 cushion, with unused proceeds capable of going to various purposes.
“What you’d be able to do with those proceeds then is identify other purposes that are authorized under the public hearing–street, water, sewer, sidewalk, sanitary sewer, or any of those,” Schultz explained. “So you could choose to fund those projects or not, or you could use the proceeds to pay debt service.”
However, Schultz re-emphasized that even if they took out the entire financing, the city would still avoid a jump in its debt service levy as other debts fall off in the coming years.
“This shows that including the debt in column P at the full principal amount of $3.7 million, you’re debt levy in column G is showing a decline going forward over its current level,” he said. “So, it’s consistent with the property tax decline that we’ve been talking about throughout these discussions.”
Thus, Schultz says the council will still have two questions to answer during the hearing next month, particularly regarding the timing and amount of financing.
“Do you want to do the full $3.7 million knowing your levy will be lower, or do you want to pare that back a little bit,” said Schultz. “Also, do you want to proceed based on the JEO cost estimate dated October 23rd, or do you want to wait until later.”
Red Oak Mayor Shawnna Silvius says JEO is expected to wrap up surveying for the housing project by the end of the month. In related business, the council also approved a memorandum of understanding between the city and Woodbridge Development for the Studio One Townhomes Project.
In other business, the council…
–By 4-1 votes, approved the third readings and formally adopted 5% franchise fees with Mid-American Energy for both natural gas and electric services. Councilman Pete Wemhoff dissented on all four votes.
–Approved the Mayor writing a letter of support for the Historical Preservation Committee regarding how the city will support the HPC in applying for the 2023 Certified Local Government Grant to establish historic blocks.
–Approved a transfer purchase to a hosted server with Midwest Data
–Approved setting base wage adjustments for non-union employees based on the scale approved by the council earlier this year.
–Approved the purchase of two vehicles for the Red Oak Police department from Red Oak Chrysler for $41,629 each.