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Borrowing discussion turns to streets

T-R PHOTO BY SUSANNA MEYER A road closed sign stands in front of West South Street to close off the area for improvements.

The city council began discussions about general obligation borrowing for fiscal year 2023 on Monday, sparking a conversation about grant projects and street repairs.

Before starting the discussion item on borrowing, City Administrator Jessica Kinser presented projects which could benefit from Destination Iowa grant funding. Three public projects in the Linn Creek district would be eligible for a grant application if they are at least 50 percent funded.

The Destination Iowa project carries $100 million in funding from the American Rescue Plan Act. A $20 million portion of that funding will be used for “Creative Placemaking designation.” This will fund projects in up to three communities which enhance tourism and attractions.

If Marshalltown is chosen, it is eligible to receive 40 percent of the funding for its projects.

Three city projects Marshalltown may consider using to apply are the splash pad, a trail bridge at Linn Creek and the River’s Edge trailhead.

In August, the council approved a professional services agreement not to exceed $50,000 with Bolton and Menk for preliminary splash pad designs. The city has also discussed a bridge over Linn Creek to connect the tennis complex with the freedom rock trail. The trailhead comes as a recommendation from the Iowa River’s Edge Trail Placemaking Plan to be placed near the skate park.

A 50 percent commitment for these public projects would be $1.76 million. Funding is recommended to come from fiscal year 2023 general obligation borrowing.

One private project was also proposed: renovations and updates to the Martha Ellen Tye Playhouse. The Fisher Governor Foundation is included as a co-applicant on that project. Funding would be used to renovate bathrooms, install accessibility accommodations and upgrade the sound system for the theater.

“I continue to have enthusiasm for this work,” said councilman Dex Walker about the projects. “I believe that what we have hypothesized would happen with more community events, more community pride, the injection of some private donation and investment has occurred and will continue to. I look forward to seeing what this district becomes in the next 10 years.”

Councilman Mike Ladehoff echoed Walker, noting applying for the grant could meet several goals the council has often discussed.

“If the state’s willing to pay 40 percent of it, I’m all good with that,” he said.

A fork in the roads

Not all members of the council agreed that now is the right time to pursue funding these projects, even with 40 percent of funding coming from grants.

“I want this just like everybody else does, but I think that $1.7 million borrowing could be better put to fixing the streets,” said councilor Gary Thompson. “I’m really hesitant about doing this right now.”

Thompson referred to discussions which took place during August’s franchise fee workshop, when the council was made aware of a number of maintenance needs at city facilities.

In the debt capacity workbook Kinser presented to council as part of the borrowing discussion, street improvements are slated at $2.65 million in fiscal year 2023. Kinser said this number was lower than when it was discussed in March because of projects being moved and cost estimates changing.

The city typically allocates $3 million toward street improvements annually. During a council meeting on July 12, 2021, City Engineer Jay Koch told the council that a $3 million per year budget for streets would see more streets continue to fall into disrepair.

“”Basically, you’re going to have more streets go into the poor and very poor category,” he said. “When you start to do reconstruction, $3 million doesn’t go very far.”

A total of $10 million worth of borrowing for projects was laid out in the workbook. It included the Destination Iowa projects along with the downtown implementation plan, West End Park phase two, sidewalk gap projects, dangerous and dilapidated buildings, a pedestrian alley and city hall parking lot.

“Almost 100 percent of this needs to be put on hold and all the money pushed to streets,” Thompson said.

Thompson went on to clarify that he would like the dangerous and dilapidated buildings and sidewalk gap projects to move forward. Otherwise he would like to see as much as $8 million put toward street improvements.

Councilman Jeff Schneider countered that the funding from Destination Iowa would be hard to pass up.

“It makes sense to do this now because of the potential 40 percent bonus from Destination Iowa,” he said.

Councilor Gabe Isom agreed with Schneider’s point.

“I don’t disagree, Gary. We need streets,” he said. “I also want the streets to bring people to something nice. That’s what this is. I don’t want to jeopardize growth when we have free money on the table that allows us to execute some of the projects in front of us.”

Kinser said the city has an estimated council designated local option sales tax fund balance of $2.3 million. Some of that balance could be used toward projects on this list, freeing up funding for street repairs while not exceeding $10 million in borrowing.

Last fall the council agreed to cap its borrowing capacity at 70-percent.

“There are ways to shuffle things around here with other sources if that’s something that you would like to do,” Kinser said.

The council will resume these discussions during its Sept. 26 meeting. It will likely make a decision on borrowing at that meeting so it can hold a public hearing on Oct. 10. Bond sales will take place on Nov. 14.

Kinser noted the council will need to make a decision about whether to borrow for Destination Iowa projects during the Oct. 26 meeting in order to meet the deadline.

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