by Mari Radtke
The Marcus City Council on Monday March 12 heard financing options from Suzanne Gerlach and Jon Burmeister with PFM Financial Advisors LLC. They are working with Marcus Council on financing the water project.
Different mixes of financing tools available to the City were considered. Interest costs, time, changes to the city’s borrowing capacity, cash flows and other issues were discussed in some detail. Tools considered include State Revolving Funds (SRF) loans. Two ways to use this financing tool, in a mix with other tools were discussed. USDA will ultimately hold loans for the city, but not until after the project is significantly complete, estimated to be in fiscal year 2029. Community Development Block Grants (CDBG) are granted out of Iowa Finance Authority (IFA) and is a potential financing tool. This is a very involved grant program and will require income information of the city residents, detailed project costs, timelines and more. General Obligation bonds will most likely be part of the mix. The council is considering how much, if any, available taxing capacity is available to Marcus and how much they may want to use on this project. Estimates are based on current . property tax value. A current levy rate on various GO bond issue amounts were looked at and wha the dollar amount affect might be in different scenarios.
GO bonds are limited by law to be no longer than 20 years. USDA loans can go for 40 years.
In order for Marcus to qualify for at least some of these financing tools, the rates must show they can pay the debt, limiting use of tax dollars to pay operational and debt service for an enterprise. The rates are currently targeted for 150% rate increase over 3 years. Council approved the first increase will become effective September 1, 2025. The base rate will become $14.75, currently $9.83 and the first 1000 gallons will go to $9.78 per month. The first 1000 gallons is currently $6.52 per month. The next two increases are set for July 1, 2026 and 2027 each. Annual 4% cost of living increases will be in place each year after that.
Sewer rates are tied to water rates. Beginning September 1, 2025 the sewer base rate becomes $7.00 per month and will adjust each July 1 for the next two years. Council approved the first reading of the new water rates ordinance. A second reading will be held at the June 9 regular meeting.
The repair bids to Fenton Street were way over estimates. Council will seek new bids. Steve Schmillen abstained from the vote.
A request was made for the City to sponsor fireworks over July 4 this year. After some discussion, the request was voted down.
The pool is expected to open on Memorial Day weekend, barring any unhappy surprises. Council approved the pay for a manager and lifeguards.
In consent business the city transferred funds as is standard practice. A Clubhouse account had been established for the City to pay construction costs throughout the building of the new clubhouse with repayment to come from clubhouse revenues. On Monday, Council approved transferring $46,173.33 from the Clubhouse fund to the Local Option Sales Tax (LOST) fund as a first repayment for the construction costs. Other transfers were from the LOST fund to Debt Service and from LOST to the city’s portion of the cost of the trail, $173,747.36.