Mt. Pleasant to sell $2 million in bonds for water well project

This week, the city of Mt. Pleasant will be selling just over $2 million in bonds on behalf of Mt. Pleasant Municipal Utilities.

The proceeds from the bond sale will fund the Cedar Lane well project, the construction of a new city water well.

Jack Hedgecock, the utility’s general manager, said that the collaboration between the utility and the city made sense.

“Because of the way the city leverages grant money, they have kind of an ongoing bond already,” Hedgecock said. “They’re out getting bonds and loans all the time, and their bond rating is very good.

“The Cedar Lane well project has been a collaborative effort from the word ‘go.’”

Both the city and the utility split the cost of the eight-acres of property.

The utility will use four acres for the new well and a future water treatment facility, and the city will use the other four acres for a storm water basin and a park.

While the city is selling the bonds — approved by the City Council last week — the utility is fully responsible for paying the debt.

“We will have a legal loan agreement to pay those bonds back over time,” Hedgecock said.

City Administrator Brent Schleisman said, “They’re covering all the costs. We have an agreement that they need to make all the payments.”

The total cost of the project is just over $3 million, which is higher than the original estimate of $2.86 million.

“Because of the volatility of material markets, that number went up a bit,” Hedgecock said. “It wasn’t terrible.”

The utility and the city collaborated on a $1.1 million grant from the Iowa Economic Development Authority for the project.

“We had to work through the city, as an entity, to apply for the grant,” Hedgecock said.

While the city will be selling just over $2 million in bonds, the council authorized the sale of up to $3 million in bonds.

Hedgecock explained that, by law, the full cost of the project must be budgeted regardless of any grant money that will offset the cost.

Hedgecock said that the project is on schedule to begin by Sept. 26 and be completed by July 2022.

The grant stipulates that it must be completed by Sept. 26, 2023, so there is some leeway in the project timeline in case there issues arise.

“When you drill a hole 2,000 feet deep, you don’t know what you’re going to hit,” Hedgecock said.