SE Iowa News

The Keokuk City Council recently discussed borrowing a large sum of money for road projects.

During the Jan. 5 meeting, the Keokuk City Council opened a public hearing to discuss a loan agreement and note issuance of $5 million for the City to fund necessary road repair projects. Cole O’Donnell, the City administrator, explained that the bond for $5 million was part of the plan to borrow $5 million every three years to keep up with major road repairs. Since the City was taking on debt, they were required to hold a public hearing for residents to make comments and ask questions.

Ward 4 resident Dorothy Cackley asked the council how much bond indebtment the City had and when some of those debts would be paid off. The council said that the City had approximately $18 million in general obligation but they didn't have the dates in front of them; however, several notes have been paid off at various years.

Cackley also asked about the limitations of the bond. The bond is allowed to be used for essential corporate infrastructure, which includes any horizontal infrastructure for the city: water, sewer, streets, as well as 25 possible uses including the acquisition of real estate. She questioned what exactly the City would be spending the money on. O’Donnell answered that he could make no promises on what the council would spend the money on, but their purpose in issuing the bonds was for road repair and maintenance—specifically going to help out with the $3.2 million 18th Street project.

"Essential corporate purpose under Iowa law means anything for a horizontal infrastructure so they can be for streets, water, sewer," O'Donnell said in the meeting. "That's what essential corporate purpose relates to. What that allows us is the City to issue debt for those specific types of projects without having to do a referendum. If you do a nonessential corporate-purpose bond for such as constructing a building, then you need to have a referendum of the people in order to approve that bonding." 

The council voted to pass the resolution to take on the loan agreement.