The city of Decorah is borrowing up to $5 million at an interest rate of 2.85 percent to pay for upcoming projects and to refinance previous debt.
The Decorah City Council approved the bond issuance at its meeting Monday night. The city is borrowing $4.2 million to pay for a Highway 9 utility expansion project, $421,000 to refinance previous debt and $325,000 to pay for a new fire truck. The city is splitting the $650,000 cost of the new truck with the rural fire association.
Chip Schultz, financial advisor for D. A. Davidson of Des Moines, said bonds will be sold July 21 and proceeds would be delivered to the city Aug. 5. He said Monday’s action locks in the interest rate for the bond issuance.
Schultz said refinancing the 2008 general obligation bond debt will save the city $30,000 in interest costs. Three local banks, Decorah Bank and Trust, Waukon State Bank and Luana Savings Bank were among the banks that will be purchasing the bonds.
Schultz also said after issuing bonds, the city will have 65 percent of its remaining legal debt limit available.
The utility extension project will bring city water and sewer service along Highway 9 to the Decorah Business Park.