Two cities receive 20-year revolving loans
Two cities in Washington County received interest rate reductions on 20-year loans through state revolving funds (SRF).
A press release from the Iowa Department of Natural Resources and the Iowa Finance Authority said the SRF loans are for water quality initiatives in the communities. The interest rate on the loans before the rate reduction was 3 percent. Now the interest rate will go down to 1.75 percent.
The cities of Ainsworth and Kalona both were approved for this. Ainsworth will save $8,400 and Kalona will save $20,750, the press release said.
Ryan Schlabaugh, Kalona city administrator, said this would apply to the 20-year $503,000 loan the city took out for dredging Kalona’s sewer lagoon 10 years ago, Schlabaugh said.
Since the city was approved for the loan reduction, the bond attorney will have to redo the loan with the new interest rate, Schlabaugh said. Then the council will have to approve the new rate, which will most likely take place in May, Schlabaugh said.
Cheryl Smith, Ainsworth city clerk, said the city is working on its water distribution system.
“We have an old distribution system and this [the SRF loan] will help eliminate a dead end we have in the system,” she said. “This will improve the distribution and the quality of water.”
The total cost and amount of the SRF loan are yet to be determined, Smith said.