Howe is lining up to borrow money for a new elevated water tank and a citywide meter replacement, a plan the city's financial advisers say would likely add about 10 cents to the property tax rate.
The City Council on Tuesday, Nov. 17, will consider a resolution authorizing the city secretary to publish a notice that the city intends to issue certificates of obligation of up to $6.5 million. The money would go toward a water storage tank, a new water meter system and related land, easements and professional services.
The debt would be repaid from property taxes, backed by a limited pledge of water and wastewater revenue.
City Administrator Monte Walker recommends approval in a memo to the council, citing the timing of the city's audits and its current debt position.
What the money would buy
A budget quote in the council packet from Maguire Iron, a Sioux Falls, S.D., tank builder, prices a 1 million-gallon welded steel spheroid tower at $4.3 million, assuming a height of 125 feet. The quote lists the location as the GTUA system site and says the price is good for 60 days.
About $1.1 million more would pay for meter replacement. Walker's report says he met with Winsupply and Zenner about the city's planned automated meter reading project.
The tax effect
A presentation from Specialized Public Finance, the city's financial adviser, models a $5.39 million issue repaid over 15 years, with about $2.5 million in interest, for total payments of roughly $7.9 million. It projects the debt portion of the tax rate rising from 5.5 cents per $100 of taxable value to about 15.2 cents in 2028, a 10-cent increase.
