Elkader Council approves $5M loan agreement, debates bidding threshold
By Willis Patenaude, Times-Register
During its Feb. 22 meeting, the Elkader City Council unanimously approved Resolution 2021-13, which is a resolution “expressing the intent to enter into a loan agreement and providing for a debt service tax levy.”
According to the resolution, the amount is not to exceed $5 million. There is a list of items currently included in this dollar figure, such as the Keystone Bridge - $655,000 for engineering; police car - $48,300; street sweeper/vac - $250,000; fire truck - $130,000; and Carter Street - $2,650,000. That puts the current total around $3.7 million, all of which will be paid back through a property tax levy over the span of the next 20 years.
City Administrator Jennifer Cowsert indicated the word “agreement” might be misleading because the resolution “just gives the city the authority to sell bonds for the various projects.”
She also mentioned this has been a known issue, discussed by the council prior to approving it, as many of the projects and purchases have been in the works for several years.
Providing context to the situation, mayor Josh Pope stated, “The loans are for several projects that have been planned: the Carter Street project and the Keystone Bridge project. While we are selling bonds, we decided to add some we needed for vehicle/equipment needs. But the bulk of the debt is for those two projects.”
However, regarding the amount of the loan, council member Peggy Lane expressed concern about the “debt load the city carries.” She also pointed out that the price tag has not reached the $5 million mark and “that figure is used so that we have enough approved so that we don’t have go through multiple approvals and added expense to pay for these items. It is the hope that the total will be under the $5 million figure.”
Fellow council member Bob Hendrickson also expressed concern pertaining to the budget, but added, “we have projects to complete, services to provide and equipment to purchase.”
While the total is not expected to go much higher than what’s already been listed, council member Daryl Koehn has, in previous meetings, repeatedly pointed out the rising engineering costs associated with the Keystone Bridge project. That concern was also evident at the meeting, when the council selected the engineering firm IIW to continue as engineering company for the project.
Another issue that was still under debate at the meeting was the bidding process and threshold for all non-emergency projects. Koehn continued his push for lowering the threshold to a point that makes it inevitable bidding will occur. The issue has been debated since Central Tank Coatings, Inc. was given the contract to repaint the water tower.
What led to this pursuit by Koehn is a desire for “transparency” in the bidding process and in how the city is “spending taxpayer dollars,” he said.
During the meeting, Koehn suggested more local contractors should be contacted and a list should be created of whom to call for certain projects, and the bidding process should evolve from there.
The issue created tension, as Lane, who didn’t disagree with Koehn’s overall assessment, stated, “there are people in positions to know what is best.”
One of those people is Kim Werger, lead operator for PeopleService. Werger presented the water tower repainting issue to the council roughly a year ago, and members approved Central Tank Coating. At this meeting, he continued to voice opposition against lowering the threshold and defended the decisions on who has received jobs and who hasn’t.
He said the people who have received the jobs are the ones who are reliable, dependable and actually show up to do the job. If the council is pushing for transparency on this issue, then he called for “transparency in everything.”
Pope said in an interview, “There’s already processes in place via the state law to make sure that bidding is fair. It doesn’t hurt to look at these processes to see if improvements can be made. I know all the council members are interested in transparency, so if we can improve, it’s a good thing.”
Lane shared a similar statement. “We are in compliance with Iowa law, but if we find that is not necessarily a good fit for our town, then I will support a change, but until more information is collected and we clarify what projects fall in which categories, I don’t feel comfortable changing how we do business,” she said.
In an interview, Koehn, who has served on the city council for about 16 years, he was asked why the issues of transparency and the bidding process have become an issue.
“I just want transparency. Over the years, I’ve seen contractors working in town that I see just one and I know there are some other young fellows that have come into business since I’ve been there that would also want the opportunity, or at least have the chance at some work in our community,” he said. “You know, we’re spending taxpayer dollars and they have a right to know that they’re getting the best bang for their buck.”
As it stands now, the issue remains unsettled. The council decided to table it for future discussion, in an effort to get more information about what Koehn is seeking and whether or not it can even be done.
