City Council - Regular Meeting

hear you.

Talk into your microphone.

Now it's 530.

Now it's 530. Okay. It is 530. I'm going to call this meeting. So if you'd like to participate, please rise for the invocation, which will be followed by the Pledge of Allegiance.

Father, we're truly grateful for the day that you've given us. We thank you for the truth of your word. And God, I pray that you would help the city council meeting tonight. I pray for each of the council members. I pray for our mayor. I pray for our city leaders. And Father, that you would give them to direct our city. God, it is much needed. And Father, there's always many things to be decided. And God, I pray that they would just have a servant's heart to decide and be looking after your will and just the betterment and the best for the city and for the people of the city. We do continue to pray for protection for our police officers and firemen. God, that you would help them and give them just strength day by day to do the work that they have been called on to do and to accomplish. And Father, to keep our city safe. God, we ask for your blessing upon the city. And Father, sometimes we don't necessarily deserve it, but we ask for your mercy. We pray, God, that tonight's meeting would go well and that you would just continue help each decision to be made that would be good and right and the best decision that can be. We ask it in Jesus' name. Amen.

Amen.

Please be seated.

Okay, so if you would take the roll, please.

Council Member Dupre. Here. Council Member Kavanagh. Here. Council Member Reed. Here. Council Member Galloway. Council Member Hoffman.

Here.

Mayor Foote.

Here. First item is consent agenda part one, so I would entertain a motion to approve consent agenda part one.

Motion to approve. Second.

Any questions or comments?

Yes, I'd like to pull number five for later discussion.

Okay, so it's been motion to remove number five for later discussion. He said later discussion. Is this in conjunction to any other agenda item that we have?

Probably number eight.

So it's been motioned to move item number five to be part of discussion agenda item I-8. Second. There's a second. So to move item number five, Chris, if you would take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reid? Yes. Council Member Hoffman?

Yes.

And now I will take roll to approve.

So now we would take roll to approve the consent agenda minus number five.

Council member Dupre. Yes. Council member Cavanaugh. Yes. Council member Reed.

Yes.

Council member Hoffman.

Yes. Proper procedure. If you pulled off the consent agenda, you still debated here. because as part of the consent agenda, you would be approving that separately. So as part of the consent agenda, you still have to discuss that particular item while you're on the consent agenda.

So we can't motion to move it into a different place in the agenda?

You as chair could do that without a motion. You can rearrange it.

I am moving item number five to be in conjunction with I-8.

Yeah, I just want to make sure that we're following proper rules of order.

But didn't we do that when we motioned to remove it and add it to item I-8?

That was what the motion was. That was the motion, but really the motion should have been to remove it and consider it separately, but I'm just being picky, so.

Okay. I think we got done what we needed. Yes. Okay. So moving on to consent agenda part two, do I have a motion to approve?

Motion to approve. Second.

Questions or comments? Chris, take the roll, please.

Council Member Duprey? Yes. Council Member Kavanagh?

Yes.

Council Member Reid?

No.

Council Member Hoffman?

Yes. Moving on, do I have a motion to approve the agenda?

So moved.

Second. Chris, take the roll, please.

Council Member Duprey? Yes. Council Member Kavanagh?

Yes.

Council Member Reid? Yes. Council Member Hoffman?

Yes. And now administrator.

The only thing that I wanted to mention is we talked about it during the budget process and in conjunction with adoption of the budget at the time that I was going to be working with staff to create some additional information under priority-based budgeting. And so I talked with some staff further today and will be starting that. Hope to have that done over the next four to six weeks. I know that some council members and the mayor had expressed trying to have everything down to zero by July 1. Worked my best to try to get there by that time or at least have some recommendations. If not, it'd be very shortly thereafter that for further consideration in the future. So I just wanna let council know and public know of where we're headed there.

Okay, thank you. At this time, if there is anybody, any citizens here that would like to speak on any of the agenda items, I would encourage you to fill out a slip of paper, which is in the basket on the banister. And then that can be brought up to me and we can get you plugged into the right agenda item. So with that, we will move to public hearing.

This is the time, place, and date set for a public hearing approving the plan specifications form of contract for the Jefferson Street Bridge expansion joint project and awarding the contract.

So with that, I would declare the public hearing open and hand it over to City Engineer Bergmeier.

All right, thank you, Mayor. So this project will consist of repairing a damaged damaged expansion joint on the Jefferson Street Bridge. Approximately six feet of bridge will be removed. The deck reinforcing will be cleaned. In addition, reinforcing will be added and studs will also be added to the beams on either side of the expansion joint to better transmit forces from the decks of the structure. Bids were received and opened by the city of Ottumwa on May 6th, 2026 at 2 p.m. Four bids were received. The low bidder for the base bid was Iowa Bridge and Culvert of Washington, Iowa in the amount of $176,500. Because of difficulty getting the required expansion joint in time for July start date, we bid the July start date as an alternate. Only one contractor put in an amount for the July start date and the total amount for a July start date is $226,750. So engineering does not recommend awarding the alternate for the earlier start date due to the additional cost of $50,250. Little presentation since it's a public hearing. This is the expansion joint. This is the day we discovered it. see right here it's deflected down we drove one of the city trucks on it someone one of the workers noticed it was making a funny noise when he drove across it so we closed the bridge temporarily went out there parked on it and it was deflecting down about two inches right here and as you can see it's pulling away from the concrete on this side that's where we closed it put a plate over the top of it and uh and reopened it once the plate was in place um So this is the existing section. You can see like all it is is, what's that? I'll ask the super laser pointer, don't look at it. It was just cantilevered out over the top of the top flange. There was reinforcing in it, but it wasn't enough to keep the forces from concentrating on the edge of that flange and cracking. It cracked the concrete right here and kind of sheared off right at the edge of the old beam. So the new section looks like this. it's got concrete going all the way down to the bottom flange so the concrete comes out here and it goes all the way down to the bottom flange and then they're welding studs every 12 inches on the beam web to tie that concrete to the actual beam itself and uh some of the other beam or some of the other expansion joints on the bridge have the same same setup so we know it works it's they've had zero problems with this setup now so that's the changes we're going to make to make sure this doesn't happen again

Phil, how many other expansion joints are we predicted to work on?

This is the only one. Every other one should last the life of the bridge. OK. So the low bidder plans to mobilize as soon as they can. They're going to order the expansion joint once they get the contract awarded. They said it's a 10 to 12 week lead time. So we're looking around September 1st. They said if it comes sooner, they'll start sooner. They're looking for work, like fill in work to do. So it's not something they're going to push off. Um, getting the alternate alternate start day of July 15th, that was to try to get it open back up before school started. Um, but the additional cost of over $50,000, you know, it's pretty much a 30% price increase. I'd recommend just waiting until, until the low bidder comes in and there's about a one month construction time. So we gave them 20 days to get it done four weeks, you know, a little bit of weather here and there about a month to get it open back up again, once it's closed down.

Okay, any questions or comments from council?

It is safe to drive across the way it is? Yes. There's no danger of somebody falling through or anything?

No, no danger. That's a... I want to say a three-quarter inch or one-inch thick steel plate we have across there. It's extremely heavy.

And the reason that can't just stay there is because of the expansion in the wintertime, the moving of the, well, hot in the summer and cold, it'll break loose.

Yeah, and it's not very fun to drive over that thing if you hit it wrong. So, yeah, we want to get the whole expansion joint. back on there as soon as we can yeah i just figured that plate wouldn't stay through all it's only bolted on one side so the bridge is free to move right now but it's still you know we've already had one bolt break from the flex the amount of flexion we get right because it's a It's a parabolic bridge deck, so the bridge deck is rounded. There's not a center crown in it, and so you can't get a plate that thick to lay flat all the way across the deck. And so you get a little bit of flexure every time someone drives across it, and you've already had one bolt snap off. So, yeah, sooner is better.

Just in response to Councilman Kavanagh's question about the safety, we did suggest that motorcycles not use the bridge because of the plate. Is that correct?

Yeah. Not a motorcycle driver, but just thought it would be an abundance of caution to tell motorcyclists not to drive across it in case they're If you don't hit it 90 degrees, I'm sure it can cause issues. Or if you hit a bolt just on the right side of your tire, I don't want to be responsible for encouraging them to drive across there.

Just because it's raised a little bit. Yeah, out of abundance of caution.

Well, thank you for taking the lesser amount.

Yeah. Well, it's up to you guys. I just recommended you guys go with the lower amount.

I appreciate that.

We buy into that. Okay.

This is a public hearing. Is there anyone from the public that would like to speak on this matter? If not, I would entertain a motion to close the public hearing. So moved. Second. Chris, take the roll, please.

Council Member Dupre. Yes. Council Member Kavanagh.

Yes.

Council Member Reed. Yes. Council Member Hoffman.

Yes.

Resolution number 133, 2026, awarding the contract for the Jefferson Street Bridge Expansion Joint Project to Iowa Bridge and Culvert of Washington, Iowa, and the amount of $176,500. Recommendation pass and adopt resolution number 133, 2026. Motion. Second. Chris, take the roll, please. Council Member Dupre? Yes. Council Member Cavanaugh? Yes. Council Member Reed? Yes. Council Member Hoffman?

Yes.

Ordinance number 3258-2026, an ordinance repealing and replacing Chapter 14, Article 1 of the Municipal Code of the City of Ottumwa for the purpose of better defining the authority of the Ottumwa Fire Department. Recommendation pass the third consideration and adopt ordinance number 3258-2026. Motion to approve.

motion to approve second chief canto leaving council mayor foot administrator wrath tonight would be your final reading of this ordinance adding the language into chapter 14 that gives the authority to the fire department now again As we spoke previous times, this is already established through multiple areas within state law. This just kind of takes it and puts it within our ordinance and makes it a little clear for people who are looking to find some of that information. So I ask for your approval for this third reading.

Any questions or comments from council? Okay, Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reid?

Yes.

Council Member Hoffman?

Thank you.

Resolution number 116-2026, approve wage and insurance re-opener with Ottumwa Police Union Teamsters Local 238. Recommendation pass and adopt resolution number 116-2026.

Do I have a motion to approve?

Motion to approve.

Second. Second. Ms. Kojo. Thank you, sir. Ms. Kojo, sorry.

This had come to you all a few months back, maybe about six weeks or so back. This was the agreement with the police department. This is a result of our negotiation that we had earlier this year. The police department, the union ratified that agreement, agreed to it, signed it, and then this is that formal contract.

Any questions or comments from council?

Why was it ratified? I mean, you had, there already was a contract.

It has to be ratified. Yeah. Everything. So we came to you all with a, here's what their final offer was. Here's what our final offer was. We wanted to make sure that council was going to approve that. And then they took that back to their union to the, so that the entire group could ratify it. And they have to do that before we file anything with a perm with the public employment board.

Any other questions? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reed? Yes. Council Member Hoffman? Yes. Thank you. Resolution number 117-2026, approving and authorizing execution of a mortgage release for 238 South Adela Street. Recommendation passed and adopt resolution number 117-2026. Motion to approve.

Move the recommendation. Second. Second.

All right, this is for 238 South Adela. On October 14th, 2003, Shawna Heistoffer entered into a mortgage and promissory note with the city for housing rehabilitation. The original amount was $21,965, followed by an amendment to that on December 3rd, 2003, that it increased the original loan amount by $3,034. So the new loan amount was $24,999. The note had zero payments and no interest and forgivable after the last maturity date of October 14th, 2013, which has been met and a release of mortgage is being requested for the property. Again, these next six items are all mortgage releases. I think this is the last group that I have for you all.

I mean, ever?

I don't want to say never, but for now, these are the last ones.

So are there any questions or comments? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh?

Yes.

Council Member Reid?

Yes.

Council Member Hoffman? Yes. Resolution number 118-2026, approving and authorizing execution of a mortgage release for 1044 South Webster Street. Recommendation passed and adopted. Resolution number 118-2026.

Your motion to approve.

Move the recommendation.

Second. Okay, this was August 19th, 1999. Mildred L. Roop and Jackie R. Roop entered into a mortgage and promissory note with the city for 1044 South Webster. The original loan amount was $2,541, and the maturity date was August 19th, 2002, which has been met, and the city recommends a release of mortgage for this property.

Any questions? Chris, take the roll, please.

Council Member Dupre. Yes. Council Member Kavanagh.

Yes.

Council Member Reid.

Yes.

Council Member Hoffman.

Yes.

Resolution number 119-2026, approving and authorizing execution of a mortgage release for 306 Mineopa Avenue. Recommendation pass and adopt resolution number 119-2026.

Is there a motion to approve? Move the recommendation.

Second. Second. On January 26th, 2001, Mary Gina Smith entered into a mortgage and promissory note with the city for 306, Minneapolis. The loan was for housing rehabilitation and the amount of $21,040. The note had zero payments and no interest and forgivable after the maturity date of May 18th, 2011, which has been met and the city is requesting for this mortgage to be released.

Any questions? Chris, take the roll, please.

Council Member Duprey? Yes. Council Member Cavanaugh? Yes. Council Member Reed? Yes. Council Member Hoffman? Yes. Resolution number 120-2026, approving and authorizing execution of a mortgage release for 325 North Weller Street. Recommendation passed and adopt resolution number 120-2026.

Your motion to approve. Move the recommendation. Second.

Chris. October 25th, 2001, Vesta Pearl Robinson entered into a mortgage and promissory note with the city for 325 North Weller. The loan was for housing rehabilitation in the amount of $1,443. The note had zero payments and no interest and forgivable after the last maturity date of October 25th, 2004, which has been met and release of mortgage is being requested.

Any questions? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reed? Yes. Council Member Hoffman?

Yes.

Resolution number 121-2026, approving and authorizing execution of a mortgage release for 320 Taft Avenue. Recommendation passed and adopt resolution number 121-2026. Is there a motion to approve?

Move the recommendation.

September 23, 1999, Rebecca L. Collier entered into a mortgage and promissory note with the city for 320 Taft Avenue. The original loan amount was $17,822, followed by an amendment on December 23, 1999, that increased the original loan amount by $2,430. making the new loan amount $20,252 that had zero payments and no interest and forgivable after the maturity date of September 23, 2010, which has been met and the city recommends releasing the mortgage.

Any questions? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reid? Yes. Council Member Hoffman?

Yes.

Resolution number 122, 2026, approving and authorizing execution of a mortgage release for 326 Grand Avenue. Recommendation pass and adopt resolution number 122, 2026. Is there a motion to approve?

Move the recommendation.

Second.

Chris. Okay, this is the last one from me.

On March 22nd, 2000, Rick Glasgow entered into a mortgage and promissory note with the city for 326 Grand Avenue. The original amount was for $16,682, followed by an amendment that increased the original loan amount by $500, making the new loan amount $17,182. that had zero payments and no interest and forgivable after the maturity date of March 22, 2011, which has been met, and the city recommends releasing the mortgage.

Any questions? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reid? Yes. Council Member Hoffman?

Yes.

Resolution number 123-2026, directing the acceptance of a proposal to purchase 2.950 million general obligation capital loan notes series 2026. Recommendation pass and adopt resolution number 123-2026. Is there a motion to approve?

Motion to approve.

second mr o'donnell thank you mr mayor uh council members uh the bond is for the 27 20 fiscal year 27 cip projects and equipment i did attach a list uh bids were were to be received on june 2nd uh which they were final numbers uh came up with uh jp jp morgan chase option b with an interest rate of 3.92, these are callable. They do have an option A that has a slightly lower rate, but they don't allow us to call the bonds. And what we mean by calling the bonds is that after a certain number of years, if there are interest rates out there, we can call those bonds and refinance them at the lower rate. So you do have the option if you wanted the lower interest rate, it's just that we would be locked in for the term of the bonds. We couldn't refinance them. Tim Oswald with Piper Sandler is here to help go through the bids and the process. I want to remind the council that this is acceptance of a loan note. You have already had a public hearing and a vote to issue the notes. This is similar to bidding a contract for a road project. You've already approved the plans and specifications, and now you're just approving the bid. But again, Tim Oswald can help answer any questions or explain any of the bidding process and the results.

Thanks. So the bids were due, and we did receive... Six bids. JP Morgan did what they typically would do, and that is offer two options. One, they always offer us a non-prepaid or a non-callable option. Almost always has the lower interest rate, as Cole mentioned. When we put together bid specs, we typically tell bidders that the loan has to be callable at some point in time and we specify a date. In this case, the date we specified was 2032, that the loan had to be callable no later than that date. I appreciate what JP Morgan does. I like getting the additional option, but I consider it non-conforming in that it didn't follow the specs that the bidder was given. But they did give us a proposal that did follow the specs, which is what we've listed as the recommended approach as cole mentioned it is your choice you can choose either of those two or any of the others if we were you to want to do so um the dollar amount 2 million 950 is what we said in the public hearing and so you're going to see that in all of the paperwork it will Because of the way the law works, you specify the hearing and then you stick with that for titling purposes. The amount that's actually being borrowed is less than that. We calculate 2,760,000 is the amount that will actually be borrowed, including all of the project items that Cole has shared with you. I can walk you through the other bids if you'd like to understand more about them. I can answer any questions you might have.

What specifically is this bonding for?

So included in your packet was a list of the projects. There are, I don't even have a full number there, but these were presented at the time of the public hearing. These were also part of the fiscal year 27 CIP. They include anything from taser replacements to replacing the library parking lot because it's crumbling and unsafe. So there's numerous equipment and projects within the scope of these bonds.

Thank you. I'd like to recommend that we take the least expensive method of financing it.

So you would want to go with option A and not have the bonds be callable at any point?

It's up to the council. I'm just making my comment.

Sure. That would be the option.

What anticipation is there to get a better rate along the way here sometime?

It could happen. I mean, you know, when COVID came around and after COVID, you were getting 1%. And if you had any bonds that were callable at that point, you probably went from around 5% to 1%. type of thing. Being at 3.92, it could get down to a 2.5 in a couple of years. It could stay at around four. It could jump up. It all depends upon how the economy is going. If the economy slows, they lower the interest rates in order to get people to spend instead of save and speed up the economy. So it all depends upon that.

So that rate is locked in as far as it cannot elevate. Is that what I understand?

Correct. Okay. What was the rate on the non-callable one?

The non-callable was 3.84.

About eight hundreds difference.

Yeah.

Okay.

which is not a big difference.

No, it's not. It's not a huge difference. Over the lifetime of the bond, that could be several thousand dollars. I don't think it would run into tens of thousands of dollars, but it would be several thousand dollars savings.

Question on the list then that comes with this. We have a list of all these CIP items. each one of these would need to go through council for final approval, is that correct?

Correct, correct. You're not approving the purchase of these things, you are approving the bonds that could pay for these things.

Okay.

So this rate was the best one

It was the best out of the, what did we have, six, you said? Yeah, it was the best out of the six. The other rates were 4.11, 4.15, 4.59, 4.12, 4.44, 5995. So all of the other rates were above 4%. And these are 10-year? Yeah, 10-year bonds. if i read this right it gets paid back semi-annually it's biannual payments yeah it's it's um uh interest only in december uh principal and interest in june all municipal bonds are set up that way i see so that's because the we pay it with our property taxes yeah yeah

And with having the bond callable, if that is a desire, after that five-year period, roughly half of the life of the bonding, anytime after that, so year six, if the interest rates come down, roll it, refinance it, or seven or eight. So it wouldn't have to necessarily, if the rates are still better here, we stick with that.

Right. So this is what we voted back in March to send to the county. And then with the property taxes, so the levy could be adjusted so that we could pay this back.

Yeah, what we did was is we passed a resolution on a pre-levy and the pre-levy was based upon estimates from Mr. Oswald on what we thought the principal and interest would be on the bonds. And so it was included in our total debt service levy. But then we also had a public hearing approving the issuance of the notes up to $2,950,000.

And we're going to come in a little less than that.

Correct. As Mr. Oswald mentioned, we usually go a little higher just in case we don't get the bids that we were thinking we were going to get.

Bid high, pray for low.

Yeah.

Now earlier we had moved consent agenda number five to this item.

I would request a second vote.

Right, I just want to make that clear that when I do call for the roll, that is simply for what is on item I-8, not consent agenda number five. If there isn't any other questions.

So these items, This is a separate subject. This list that you gave us, these are all negotiable. These are not set in stone at this point in time.

As I said, what you're proving is the money to possibly do these projects. Each of these will have to come back to the city council for approval before we're authorized to make the purchase or start the project. With the exception of the annual street maintenance program, that's just gonna add more money to us to be able to do more streets.

Gotcha.

But individual projects within that will have to be approved.

So these products were used in formulating a dollar amount to go out for the bonding. And there will be some restrictions as far as, like, if you didn't want to do a specific thing in here, it has to still follow within specific guidelines as far as if you was bonding money for the street project, it would have to be similar in that because of the life expectancy and other things. So there will be some restrictions, but it's generally following these types of things, equipment for equipment, et cetera.

Right. Just... Okay, I get that we're voting on the money.

Right, you're voting on the money that could possibly pay for what's on the list.

Right, and this dollar amount on the list, once we, this, $2,757,000 is what you came up with. And you said that we're actually borrowing a little bit less than the 2.9.

Correct.

So we will have that as our earmark so that when we do do the approval of any of these projects, we'll be just taking it down and know how much we have left. Correct.

So we're not spending more than we borrow.

Yeah.

We will deposit the portion of the bond funds and the appropriate funds, and we'll track the purchases and the projects as they go, as they're approved and as they're paid for.

So what fund would be the appropriate funds?

So 151 would be... Oh, I see the CIP numbers over here. Well, okay, so fund 151 will probably include all of the police equipment. um 151 would also include all of the uh fire department equipment fund 310 will pay for the equipment fund 301 will get the street maintenance um The ramp repair and stairs replacement for BVC, the HVAC control, and the water heaters for the BVC will be deposited into Fund 311, which is the BVC construction account. uh the demolition fund will be deposited in one and fund 174. uh pedestrian trails um will go into fund 309 um and the um equipment for parks will either go into 309 or will be in 151. um i'm not sure exactly where i budgeted right off the top of my head okay 151 will take in all of the items for IT, which is the backup tapes, Wi-Fi switches. The remodel for bathrooms for ADA will be in 151. The refund irrigation control panels at the golf course, that will go into the golf course fund, which is 750. Aquatic pumps and repairs will go, or the air compressor will go into 310. Aquatic center pumps will go into 309. And library parking replacement, probably 151, but I've got to see where I budgeted that.

Okay, thank you.

So Finance Director O'Donnell, I know whenever we're talking about bonds and indebtedness and stuff, I guess I like to have a little bit of a thought in my mind as to where we're at, our total indebtedness, how high that's getting. Do you have an approximate number for that of where we're at?

Well, I haven't calculated with all the principal payments that are being made here in fiscal year 26, but at the end of fiscal year 25, we had about $18.5 million in general obligation debt. Our total debt was $32 million, but that includes borrowing for the landfill, indebtedness is paid through tax income financing and the loans for the sewer separation. our debt our overall debt will increase as we borrow more money for the separation project the effect of the general fund of the go bonds because we do pay some down each year that i don't believe there will be a significant increase or a significant decrease in the general obligation amounts at this time yeah we have two types of indebtedness i think can you correct me

uh general obligation bonds and then loans that we take out for like sewer separation would they be classified as revenue bonds revenue bonds okay so those are the two two types of indebtedness we have correct is that correct yeah okay and um

though I just throw a caveat on there. Sometimes we do issue general obligation bonds, but offset the interest and principal and interest payments with money from say TIF or another fund, because sometimes it's easier to bundle it all into one bond and get a better rate than trying to separate out say a $100,000 piece of equipment for sewer um or landfill or somewhere because you're going to get a you're going to get a higher rate and the terms aren't going to be as good so you roll those in but then use revenue to off the revenue from those funds to offset that cost and those are calculated by mr oswald he provides me an update on an annual basis

I guess I have one more question, and I realize I'm getting a little off in the weeds here, and you make it as clear as possible because it's real easy for us that don't deal with city budget all the time to get confused here. But you make a statement that bonding for capital projects does not negatively affect the operations budget of any department. Will you explain why that is?

Because we're not using operational funds.

Where does the money come from to make those payments? I mean, how does that work then?

Okay, so if we borrow money, we pay from the debt service levy. So we levy for the amount necessary in order to pay our debts. So it doesn't come from operational funds with the exception of sewer or landfill because if there's a portion of that that is a revenue bond, it comes from revenues derived from those funds. But as far as the equipment that's listed here and projects that are listed here, those do not come from operational funds. Those will come from debt service and the debt service makes the payments.

Thank you.

Any other questions?

Mr. Mayor, we brought number five from the consent agenda into number eight.

Yeah, so we will, right after we do this vote. Yep, we're almost there. Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reed? Yes. Council Member Hoffman?

Yes. So at this time we would look at consent agenda number five.

Correct. Based upon the city council authorizing the issuance of the notes and having approved the fiscal year 27 budget, Parks Director Rafferty requested that he be able to order the mower. It is on, you know, there is a lead time to it. I always tell the department heads that wait till in June or even the last meeting in June in order to do that because we want to make sure that we're paying for it in the next fiscal year and that the money is there. Do note that it is the six foot front mower, Gene? Yes, okay, so we had budgeted 32,000 and it's coming in at 26,000. So you're under budget already.

So divine again, what more that is, which one we're working on?

I'll let Gene speak to that.

That is on our CIP list, correct?

This is a six-foot front mount mower that the parks employees use to mow the parks with. We have two mower types. We have the 11-foot bigger mower with the fold-down decks, which are a lot more expensive. Smaller and less expensive mower is the John Deere 1550 or 1570, which has a six-foot front mount deck.

Okay, I was by there the other day, and I noticed those two mowers that are there are being kept in very good condition. And the parks manager or the person that takes care of them, campground, said that even though they were five years old, they're operating very well. So my question is, do we need what you want to order?

We do because the parks employees have two mowers that are separate from the one the campground host uses, and their mowers have a lot of hours. They're up over 2,000 hours, which is in the life cycle of the mower, where it starts needing expensive repairs and a lot of downtime. The downtime causes the parks employees to fall behind in their mowing, and then the grass gets tall in the parks. We get complaints, and it's more difficult to mow the next time when it's six or eight inches high rather than four or five inches high like it should be.

Okay, thank you. That's a good answer. I appreciate it.

I'm amazed that you guys keep up with all that mowing. I mean, there's grass everywhere, and how you guys keep all that covered, I don't know. You want your machines to be working, I know that.

Yeah, we have a good crew, but the mowers have to work all day every day when we need them to mow.

Right.

Thank you, Gene.

And then you did say, what was the price you said?

I believe the purchase price is a little over $26,000. 26,200. We had budgeted 32.

We budgeted 32.

How long did we say the lead time was?

How long is the lead time, Gene?

Two months. Two months. Okay.

Yeah. So he gets it. So if he orders it now, he's going to get it end of July, first of August, halfway into the big part of the mowing season. But this is going to be a dry year and he's not going to have to mow, right? How long will that mower last?

So what do you do with the other ones that are aged out? Do you just drive them until they don't work or do you get rid of them? Does that money go back in the general fund?

I didn't hear exactly what you said. Would you repeat that, Gene? Yeah. Yeah.

Okay, all right. They sell it to anybody that didn't hear or maybe it didn't get picked up. It's sold on govdeals.com. That money goes back into 309 because that's where we paid it from.

For the equipment fund.

Yeah.

Thank you.

It is a dumb question, but could we keep one just for a backup in case one had to be repaired and we were out for a couple weeks?

Or maybe you already got a plan like that in place, but.

Just to clarify, I believe I need to call for a motion to approve this, and we never did that part. So I would entertain a motion to approve the purchase of this mower. Move the recommendation. And I second. And if there is no other questions, Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reed? Yes. Council Member Hoffman? Yes. Resolution number 124-2026, declaring an official intent under Treasury Regulation 1.150-2 to issue debt to reimburse the city for certain original expenditures paid in connection with specified projects. Recommendation passed and adopted. Resolution number 124-2026. Is there a motion to approve?

Let's move the record. Oh, sorry. Go ahead. Let's move the record. Okay, second.

Mr. O'Donnell.

Thank you, Mr. Mayor. Two international dump truck plow trucks were approved for purchase from Fund 310 equipment purchasing, one on January 2nd, 2024, and one on July 16th, 2024. While completing the initial capital improvement plan, these approved purchases were not taken into account and not calculated into the balances for Fund 310. which creates a problem in that because the CIP, we are bringing down those reserves, there would not be sufficient funds in there to make these purchases. So staff is recommending delaying the replacement of the John Deere Road Grader from fiscal year 27 to fiscal year 28. This purchase is included in the fiscal year 2027 CIP bonding, but I did update the list based upon the assumption that this resolution would be approved. And that was budgeted for $400,000. The funds allocated to the road grader will be used to make the purchase of the two trucks. As the purchases will occur before the receipt of the funds, we are required to pass a resolution authorizing reimbursement to Fund 310. So it was during the CIP process, part of it is putting in all of the current and future expenditures. The current expenditures were not calculated in there. And so there would be an overspending in Fund 310. What this does is allows those to be financed and not create a negative balance in Fund 310. And we push the road greater to the next fiscal year.

So Fund 310 in 2024 had it budgeted for those two trucks at 435,000. Correct. And that didn't get, are you saying that didn't get carried forward?

Well, no, what it is is, well, in a way it didn't get carried forward in that when doing the initial CIP, you put in the projects, you put in all the other expenditures. These two trucks were not entered in as the other expenditures And so because the current CIP has bringing the reserve and fund 310 down to, I believe, less than $200,000, if we were to not move the road waiter to fiscal year 27 and reimburse ourselves for these purchases, that fund 310 would end up in a negative balance.

And are these pieces of equipment to be sold at auction or used by other areas?

I'm not sure that the equipment that we're placing exactly what will happen if they're being given to another department that would be able to use them in the condition they are, or if they're being sold on generally govdeals.com.

Okay, thank you.

so so the current balance expenditures for 310 i showed in the last one that you gave us was in april i think it was about 510 000 in expenditures that didn't include these two trucks they didn't include those two trucks no so that's what you're saying well that's because that's because they ordered them and they were approved they didn't come in until this month So they ordered them in 2024?

Yeah, and they didn't come in until this month. The lead time on dump trucks is unbelievable.

Wow. Glad we didn't need them right away.

Yeah. You know, before COVID, you could get them within six months or so once you order them. Now you're still looking at 12, 13, 18 months.

My last question.

Yes.

So in your report in section five, you're saying the repayment, so you're talking about the repayment back to the general fund from 310, or are you talking about, it says here that the reasonable, you expect it to be repaid in 18 months in the event, no more than three years after the original expenditure. Sure.

Oh, no, it's repaying back to 310. No money came out of the general fund for this. It's just repaying 310 back for these purchases.

So how are we repaying it, out of the general fund?

No, we paid it out of 310.

Out of 310.

Correct.

Yeah, so this is a reimbursement resolution, meaning that With the borrowing of the funds that was approved a moment ago, these trucks would be coming from that bonding. But the purchase is occurring before we have those funds. So we need to have a resolution to say that when those funds come in, we're going to replenish. So we're basically advancing the funds from ourselves and replenishing it.

So we'll kind of show a negative in 310. And then as soon as the money comes in, it'll come back. I'm following you now.

Thank you.

Any other questions? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reed? Yes. Council Member Hoffman? Yes. Resolution number 125-2026, adopting purchase policies and procedures for the City of Ottumwa, Iowa. Recommendation passed and adopted. Resolution number 125-2026. Is there a motion to approve?

Move the recommendation. Second.

Second.

Mr. O'Donnell.

Thank you, Mr. Mayor. Staff is required to review and present the purchase policies on an annual basis. One change has been made to E5 to comply with the change in state code. Previously, public entities could hold 5% of a contract for retainage until final acceptance of the project. This has been reduced to 3% per state code.

Any questions from council?

So we don't have any option, we follow that, right? It's just a procedural.

Yep, so we're just making a change to comply with state code.

Any other questions? Chris, take the roll, please.

Council Member Dupre. Yes. Council Member Cavanagh. Yes. Council Member Reid. Yes. Council Member Hoffman. Resolution number 126, 2026, adopting financial policies for the city of Ottumwa, Iowa. Recommendation pass and adopt resolution number 126, 2026. Is there a motion to approve?

Move the recommendation. Second. Mr. O'Donnell.

Again, similar with the purchase policy, the fiscal policies are to be adopted annually by the city council. There is one change in the policy, except for some changes that the city attorney did make in order to bring us in compliance with Iowa and federal codes. But the biggest changes on page five, which is sunsets, The new language is compliance with property tax reform legislation. Under Senate file 2472, any new TIF district is limited to 23 years. Current perpetual TIF areas established as slum and blighted areas, which we have, will have increment usage capped at 60% of district capacity after 20 years, starting July 1, 2027. So what that basically says is that if we were to create a new urban renewal area and to use TIF, the lifetime of that urban real area would, no matter how we designate it, whether it's slum and wider economic development, it would only be in existence for 23 years. With our current TIFs, which we have adopted as slum and blighted, they're called perpetual TIFs because there is no end date with slum and blighted. What it says is that in 2037, we will be limited to 60% of the possible increment available. There are some other rules and regulations relating back to the school levy, those will start to be eliminated in TIF districts as well. But again, the language that's in here brings us in compliance with Senate File 2472.

Is it fair to say that this is, again, more effort on the state level to kind of tighten the belt and reduce...

Well, what I will say is that not all communities have been thoughtful in their use of tax increment financing. And those few bad examples create a bad taste at the legislature. And so what they wanted to do was be able to say, okay, you get your time to do what you need to do, but after that, you need to get that valuation back on the rolls for all of the taxing entities.

This doesn't limit us in any way when we do TIP. Sometimes we do 10 years, sometimes 15 or 20. It doesn't limit us in that area.

It will as that December 31st, 2036 date approaches. Because at that point, what it is is we would only get 60% of the available increment for existing perpetual districts. Any new district that we happen to create from here on out is limited to 23 years. So we'd have to set up any of the projects or development agreements to fit within that timeframe.

Okay, thank you.

Any other questions?

So this fiscal policy that is kind of like you're upgrading. This is the first time I saw it. So this is how kind of the rules of the road for you in finance.

Yeah, this sets the road rules, correct. So some different things that are in there sets a reserve limit. There is guidelines and restrictions on how investments can be made. It talks about capital planning. So it really does give us the road work. I will say that the final sections within the within the policy are there in order to comply with any federal grant awards that we receive. Okay.

Last year you did a, how we're doing kind of report on the policies. And that was kind of nice. Are you going to do that again?

I don't remember doing that. So no, I did not.

I liked it.

Okay.

Okay. If no other questions, Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reed? Yes. Council Member Hoffman?

Yes.

Resolution number 127-2026, designating depositories for city monies and city funds not to exceed the sums indicated per financial institution. Recommendation pass and adopt resolution number 127-2026. Is there a motion to approve?

Move the recommendation. Second.

Again, this is one of these annual house cleaning items. A resolution naming depositories and deposit limits should be adopted on an annual basis. The deposit limits for the institutions remain the same. The deposit limits are set to ensure diversification of investment funds while allowing flexibility on investments to obtain maximum return. What I will tell you is when you look at the limits that are there, Wells Fargo is our checking account. We try to maintain $1.5 to $2 million in the checking account. It doesn't get any interest, so we want to maintain just what is necessary to pay bills on a regular basis. Salvatum with Savings Bank, we currently don't have any investments with them. Community First Credit Union is at their limit. Basically they have a large number of our CDs because they have been providing interest rates that are significantly higher than the other institutions.

And what is their limit?

18 million.

What is the interest rate that they're given approximately?

They've been coming in at 3.94% on a regular basis while others are coming below that. IPATE, which is the Iowa Public Investment Trust, we maintain about a million dollars in the general fund portion of it. And then we have some sub funds. The cemetery funds are now invested there. There's about $900,000 in that. Return on that varies. I think the daily rate when I checked today was 3.34, but that's better than what the cemetery was getting before, which was around 2% or 0.1% in a savings account. And then Iowa State Bank, our current balance there is 19.5 with 15.5 in the high interest savings account getting 3.5. The CDs that are there $4 million worth are at 3.9%.

That was 19.5 million?

Yeah, 19.5 million, yes.

Have you ever calculated like for a past fiscal year, fiscal year 25 that ended, like how much interest we earned in that year altogether?

Could you give us a ballpark? Yeah, we distributed across several accounts, but you're talking... million two million five in in interest but again it's distributed across multiple accounts uh multiple funds and that always the interest always goes into that fund that has yeah it we because we co-mingle all of the all the investments what it is is when we get the interest um we have a a formula sheet and it takes the um uh current balance of the fund against the um uh balance of the reserves, creates a percentage, and then takes that percentage times what the interest is for that month, and then distributes it to each of the funds that earn interest.

And are these funds paid monthly?

The interest? Yes. We do get monthly interest from IPATE and the high yield savings account. The rest are timed investments. And then when the CDs come mature, then we get the interest at that time.

Okay, thank you.

Any other questions? Chris, take the roll, please.

Council Member Dupre. Yes. Council Member Kavanagh. Yes. Council Member Reid. Yes. Council Member Hoffman. Resolution number 128-2026, consideration of a collateral assignment of development agreement between Avia Tumwa LLC, Nicollet National Bank, and the City of Tumwa. Recommendation passed and adopted. Resolution number 128-2026.

I have a motion to approve.

Move the recommendation.

Second.

Administrator Rath. Second.

All right. So on April 7th, 2026, the city entered into the purchase sale and development agreement with A.V. Atoma LLC and the Greater Atoma Foundation as part of A.V. Atoma LLC's lending agreement with Nicolet National Bank. The bank has requested the attached collateral assignment to secure the loan dollars. Article 7 of the PSDA does allow for the assignment of assets pending written consent by the city, which shall not be unreasonably withheld is what it states in the agreement. This action would provide security and collateral to the lender should the developer default on their note. Nothing changed with regard to the terms of the PSDA or the obligations of the developer therein. So essentially, the developer, Build to Suit or Aviatomo LLC, is putting in the infrastructure for this Vogel Heights area. And in order to do so, part of the development agreement is they will, during certain check marks, be getting some of those dollars back. But in order to have the infrastructure built, they need to go out and secure dollars to do that. the bank is saying, well, we would like to have something backing that loan, and that would be the interest in the property, essentially, to do that. The first one was the first payment of the first quarter came due with them kicking off the construction. That was about $470,000 per the agreement. I think the loan total was $1.3 million. The second payment will be after the infrastructure is complete and turned over to the city. That is the next 50%, so those two payments alone would take care of the 1.3 million. The last quarter does not pay it out until at least five housing units are completed, and that was part of the overall agreement there. Essentially, this is just like if you go to get a car loan or you're financing your home, there's something backing those dollars. And that's what the bank is looking for here is an interest that says that they have some skin in the game, so to speak.

So Administrator Rath, correct me if I'm not thinking right. So what they're asking for from us is the money that we are, the 1.2 million that we've said we're going to pay, build a suit, AV Atoma, that if they default, then we're going to give that money to them. Is that correct?

Not specifically. We only give that money out if the certain check marks are reached. So what it would do, I guess, is say that the bank could then hire somebody to complete that work, finish that work and have the dollars paid back at that point. So we had a request to pay the first $470,000. I think it's a total of about $1.8 million if every checkmark is hit. And then the next one, when the infrastructure is complete, that should be enough there to pay back that loan.

So it's 1.8, but not 1.2?

Let's see. Yeah, I think it was one point. Well, the city's agreement with the developer was 1.88, I believe.

So I guess I'm thinking of the idea of co-signing something and being concerned about that idea. You know, is that what we're doing? We're co-signing with them that they will meet their obligation?

We're agreeing that the land, so to speak, could be used as the collateral for the project.

But the land will be used? Yeah. Yeah. Is that what they're going to, okay.

Yeah, we don't pay out the dollars unless those check marks are hit.

But so the bank is wanting, the land will go to them if the developer doesn't meet their obligation.

Well, the rights to complete the project.

The rights to complete the project.

But the land is the collateral?

Yeah, so the collateral agreement, essentially it's signing over that the value in the project, the future project as developed is what we're basically agreeing to. So they would have to still follow through with the development of that. The land itself doesn't have value without the property improved and the homes on it. And if the council is not agreeing with this, then we would have to give a reasonable rationale as to why we wouldn't agree based off of the language in the agreement. infrastructure should be at 1.88 million is the total amount of the agreement. The bank is only loaned 1.3 towards the project. The build to suit is carrying the balance of that until the homes are completed or the five homes at least are completed. And they have more than half the lots already sold interest in building that out. They're, I said, they've started construction. They're looking to have this completed by September and having homes started to be built in the fall. Winter construction and having them opened up, some of them opened up by spring.

So would you consider this a common thing? Was this anticipated that they would probably ask this?

Yes, I would say. I mean, there's got to be some kind of backing. Now, if the company provided that separately, but this is the value that they have to offer up as part of that. And I think that's why the agreement is drafted as such, to allow for that flexibility.

What then if Bill D'Souza failed in some way? So what's the worst that could happen to a TUMWA?

that we wouldn't have the homes built there, at least not in the timeline that we're anticipating. The first payment out, we'd have to go through the legal challenge of trying to recover that. We've got the agreement to build a suit in place to get the properties developed and the timeline for that. That's what we're looking at and aiming for. So the worst that would happen is kind of the status quo.

So if that were tied up in some sort of legal matter, with the land being collateral at that time, would that lock the land up where we couldn't do anything with it until that was?

Yes, because part of the purchase sale and development agreement was selling the property to AV Atumwa.

Okay.

So that would have to be settled through the court system there and getting that resolved. But to answer your question, yeah. So in many cases, what happens is the municipality will be the one putting in the infrastructure, taking on that initial cost. With this agreement, it was the developer taking on that initial cost, not having the assets on hand to be able to do that all on their own, went to a lender to get those assets. So whether we borrowed the money and completed the work or the developer did, they're taking on that risk of... the assets there and the dollars that they have owed to that. We're not paying anything if they don't complete. So we made that first initial payment as part of the agreement. We're not paying a penny more unless they hit the next one, which is the completion of the infrastructure and turning that over to the public meeting our guidelines.

And we, so we're paying them 1.88 to complete the infrastructure.

It's about 1.41 to complete the infrastructure. And we have most of that already put aside. I believe that is with the, with the borrowing tonight, I think that was the rest of it. The dollars on hand to pay for that.

So you're talking the non-infrastructure portion of it or just the infrastructure portion of it? I'm sorry.

That's about the infrastructure.

Okay, the infrastructure. What it is is there's a... It has to be paid with, in some way, with money that would be dedicated towards road projects. So we had money that was dedicated, bond money that was dedicated towards repairing the levee that we didn't have to do.

That $900,000.

Yeah, and that'll be transferred to fund 301, which is the street projects. Then a portion of the local option sales tax that would go to fund 301 will now go to fund 174 to pay these development costs. um the rain the remainder of that will then also come from those funds that would go to um uh fund 301 so local options sales tax will will fund that in totality um the the thing is is that with the loan notes that were passed tonight there's an additional four hundred thousand dollars put towards the road project. So fund 301 really does not lose out on any infrastructure funds to them.

Thank you.

Any other questions? Chris, take the roll, please.

Council Member Duprey? Yes. Council Member Kavanagh? Yes. Council Member Reed?

No.

Council Member Hoffman?

Yes.

Resolution number 129, 2026, approving and authorizing the purchase of certain real property and authorizing execution of a real estate purchase agreement with North Jefferson Street Ottumwa Trust. Recommendation pass and adopt resolution number 129, 2026. Is there a motion to approve?

We have a recommendation. Second.

Mr. Bergmeier.

Thank you, Mayor. In order to construct and maintain parts of the Blake's Branch project, several small land acquisitions are required. This acquisition will be used to connect houses facing Jefferson Street to a new separate sanitary sewer in the alley behind the behind their properties. So actually, not exactly right. So this acquisition is in place so that the existing houses that are connected to the Jefferson Street sewer, if in a future project, we can't get that sewer over the top of the Blake's Branch sewer where it crosses Jefferson Street, pretty shallow right there. This will allow us to turn it behind the houses and connect to the new 36 inch line before it crosses under Blake's branch and gets to the other side. So it's kind of an insurance policy. So it's, it's a $700 acquisition in order to have this piece of property here so that when we go on a future phase, if we can't get it over the top of Jefferson street, we can connect it to the sewer. We just put in, in the alley behind Jefferson street. So that explanation wasn't exactly correct. So anyway, North Jefferson Street Atumwa Trust has agreed to the terms and has signed the purchase agreement. This resolution will authorize the mayor to sign this purchase agreement on behalf of the city of Atumwa. So this property is between two existing houses and it goes from the alley behind the houses to Jefferson street. And it's just a, we have a, we've already put a manhole on the backside of this, this property so that if we do have to turn these houses to the east and go behind there to tie them into the new separate sanitary sewer, we can't cause right now their sewer goes into Blake's branch. So you're not actually turning the individual houses to this. You're turning this sewer line in Jefferson Street down this alley or down this property.

That's a good explanation. I was going to wonder how you're going to turn the houses. So you did well.

Would it be easier just to do that instead of an in-case, just make that the plan?

It's really hard to get inside houses and turn around each individual house to go to a different direction. We actually did for the three houses closest to the Jefferson Street sewer, where Blake's Branch crosses Jefferson Street, where we're working at now, The first three houses we did turn around to the backside because we didn't think there's any way we'd be able to get them over Blake's branch. But the house is farther up the hill. We think there's a chance we can get it over the top of the box without making it 12 inches deep.

Yeah. Okay. Any other questions? Chris, take the roll, please.

Council Member Dupre. Yes. Council Member Kavanagh. Yes. Council Member Reed.

Yes.

Council Member Hoffman. Resolution number 130-2026, authorizing execution of and directing service of notices under Iowa Code section 447.9 related to tax sale certificates held by the City of Ottumwa. Recommendation pass and adopt resolution number 130-2026. Is there a motion to approve?

Move the recommendation.

Mr. Burgmeier.

All right. Thank you, Mayor. So Wapolo County acquired nine tax sales certificates beginning on June 17th, 1996, and with the most recent having been acquired on June 18th, 2012. On February 10th, 2026, those certificates were assigned to the city of Ottumwa. iowa code section 447.9 allows the city to serve notices regarding expiration of the rights of redemption and requires city council by resolution to designate a city officer to sign such notices this resolution will authorize the city attorney to execute these required notices regarding the expiration of the right of redemption related to tax cell certificates for the city of Ottumwa so these lots haven't had taxes paid on them since at least 96 in the most recent since 2012 and the county held the tax cell certificates for these they transferred them to the city so this is gonna this will authorize the attorneys to send out notices that we're gonna I don't know what the right correct term is, redeem these and take possession of these lots ourselves. And the reason we want these lots here is to help us with the construction of phase eight. Any parts of these lots we don't use, we'll turn back over to planning and zoning and they can develop them or give them to the school and the school can build them. They're all in like the Grant Street, Norris Street area is where all these lots are at. And there's already a half a dozen lots owned by the city and by the school in the same general area too. None have any improvements on them. They're all vacant lots, every one of them.

So who's maintaining them?

Nobody. They just grew up in the forest, honestly. Forest and trash and homeless people.

Nice.

No, we want to acquire them. So we're getting the tax sale certificates from the county so we can, whatever the term is for notifying people that their tax certificate is expiring.

We can trust the county to give us a good deal.

Well, they gave them our certificates already. So I guess it's sort of free.

Any other questions? Chris, take the roll, please.

Council Member Dupre? Yes. Council Member Kavanagh? Yes. Council Member Reid? Yes. Council Member Hoffman?

Yes. And now this is the time of the meeting for public forum. So I would enter in if there is anyone in the audience that would like to speak on any non-agenda items. Seeing none, I would open it up to City Council if you have any communication to give to the public.

The Parks Department completed their tree planting at the park and the golf course today. So that project is completely done. And the beach had a very successful opening in the past two weeks. The weather's cooperated, so attendance is up.

Nice. Anything else? If not, we are going to go into recess for... I'm gonna call for a three minute recess in which we will reconvene in the conference room downstairs where we will be going into closed session. At that point, yeah, we will go back into open afterwards for any action items. So with that, I call a recess for three minutes.

Very good.