Rate cut benefits area cities
An interest rate reduction will enable the cities of Fort Dodge, Pocahontas and Rockwell City to save thousands of dollars on state loans that paid for water and wastewater system upgrades.
Fort Dodge will save $377,356 in interest costs, according to state and city officials.
Pocahontas will save $66,350, while Rockwell City will save $18,787.
Those savings will occur because the Iowa Finance Authority reduced the interest rate on state revolving fund loans from 3 percent to 1.75 percent.
”The Iowa Finance Authority is pleased to offer these Iowa communities this significant interest savings,” Dave Jamison, the authority’s executive director, said in a written statement. ”We are able to offer this interest rate reduction due to the recent growth of the program and careful financial management.”
The savings in Fort Dodge will be realized from interest rate reductions on two loans.
The city borrowed $3.5 million in 2003, and $4,673,000 in 2004, according to Jeff Nemmers, the city clerk and finance director.
The money from those loans paid for new water mains, improvements at the John W. Pray Water Facility and the construction of two new water towers plus the demolition of a water tower that once stood at the east end of Central Avenue.
The City Council approved resolutions accepting the new interest rate on both loans during its April 14 meeting.
Nemmers said that last year, the state reduced the interest rates on four loans the city used to pay for sanitary sewer improvements. Collectively, all the rate reductions have saved the city almost $900,000, he said.
The rate reduction came as a pleasant surprise to officials in Pocahontas.
”The City Council was very happy with it,” said City Administrator Eric List.
List said Pocahontas borrowed $1,615,000 a decade ago to pay for improvements to the water and wastewater treatment plants.
Rockwell City borrowed $466,000 in 2004 to pay for water system work, according to City Clerk Kelly Smidt.