The City of Mount Vernon received four bids for their $1.5 million in general obligation bonds.
UNB bank, with the assistance of Hills Bank locally, had the low bids for the bonds, with an interest rate of 3.163 percent for the 12 year bonds.
The other bidders offered interest rates of 3.6 or higher.
“Our base winner is the person who provides the lowest bid, including interest rate,” said Maggie Burger from Speer Financial, who oversaw the bid process for the city. “The other bidders seemed to be hedging where they feel interest rates are slated to go in the next few months.”
The City of Mount Vernon has a Double AA negative rating with the S and P organization, solidly in the middle of the pack for financial decisions.
There are only 11 organizations with AAA credit ratings in the state of Iowa.
“The double AA rating shows that the city has a historically positive general fund and has strong financial management,” Burger said. “There’s been consistent growth to the tax base over the years as well, especially in residential areas.”
The general obligation bonds are being used with a number of projects on the capital improvement plans. The bonds are 12 year bonds, and can be callable to pay for all outstanding debt or reconsolidated in June 1, 2030.
TIF updateMaggie Burger with Speer Financial also provided an update on the city’s Tax Increment Funding streams, which will be adopted in December 2022.
The city’s valuation has increased from $287 million to roughly $327 million in the past year, due to the construction in housing developments in the community.
While the city has some debt in TIF, all of that is expected to be paid off in the next 13 years, and there is no need for the city to levy a debt service for the amount in the fund, as the funds generated by TIF cover it.
One of those interfund balances is a loan used to pay for the new Mount Vernon-Lisbon Police station. It will be paid off in 2025.
The city also has sewer revolving loan fund debts taken out in 2019 for work on sewers in the city. Those are 20 year debts that are slowly being paid.
Burger said that as long as the city currently keeps paying on their debts and revolving loan funds, they will be completely debt free by the end of 2035.
ATV/UTV ordinance changes hearing
date scheduled A public hearing on the ATV, UTV and golf cart ordinances for the City of Mount Vernon will be set for Oct. 17 at 6:30 p.m. The changes are being made to clean up language in the ordinances now covered by the state, allowing these vehicles on roads in the community, including the registration of said vehicles. The Iowa Department of Natural Resources who will cover registrations for those vehicles. The city can no longer require registration of the vehicles.