Washington County poised to take on debt for project funding

WASHINGTON — Washington County Supervisors are gearing up to borrow money for various projects, after setting a public hearing for a bond issuance that would take on $2.42 million in debt for the local government seeking to maintain its services despite state taxing limitations.

House File 718, passed by the Iowa Legislature last year, puts a cap on property taxes used to fill local governments’ general funds. It does not, however, place such a limit on several other levies.

Washington County has historically tried to avoid taking on debt of any kind, making Tuesday’s vote an unusual move by elected officials. The approach will allow the county to use a debt financing levy instead of a general service one, ensuring compliance with HF 718, according to Northland Public Finance Managing Director Chip Schultz, a hired consultant on the bond issue.

“The goal here … is to provide relief for the general basic fund of the county. This accomplishes that,” Schultz said. “Counties used to have authority to finance any county public projects through kind of a catchall, general financing category, and that was taken away as part of that legislation.”

The bonds will pay for several major county investments. The list includes a rebuilt emergency communications tower in Wellman, new police vehicle equipment, computer and phone security upgrades, major building renovations and secondary road improvements.

The end result will cost the county more money than a general fund-based approach, however, as it pays back the bonds with interest over the next four fiscal years, taxing property owners at about $1.31 per $1,000 of valuation on top of other levies.

Supervisors have said the heightened total cost was frustrating, but stressed that they had no other way to pay for everything needed.

"I like the four-year payback, I like that we’re using this as a vehicle to get something that needs to happen, to happen,“ Supervisor Marcus Fedler said. ”It makes sense to me.“

Procedurally, the county must hold a public hearing before formally entering a loan agreement to take on the bonds. That hearing is scheduled for April 2 at 9 a.m. in the basement of the Washington County Courthouse. County officials said the bond issuance would not require an election.

Comments: Kalen.McCain@southeastiowaunion.com