Bettendorf plans to issue nearly $19 million of general obligation bonds this spring that would boost the city's debt to more than $133 million, or nearly 86 percent of its legal debt limit. The city's debt would be the highest in the state of Iowa as a percentage of the legal limit at 85.52 percent.
However, City Administrator Decker Ploehn voiced his confidence to the city council about the plan to issue millions in new general and corporate bonds, telling aldermen the city has ample capacity to raise property taxes should it need additional funds for unexpected future projects or expenses.
Bettendorf is one of just a few Iowa cities with a general fund property tax levy well below the maximum allowed $8.10 per $1,000 assessed valuation, according to Ploehn. The city's general fund levy currently is $5.44 per $1,000 assessed valuation. "This allows for future growth capacity of 48 percent, equating to nearly $5 million of potential property taxes," Ploehn stated in the budget presentation he made earlier this month.
According to statistics compiled by the city, even though Bettendorf ranks high in total debt and the debt service tax levy, Bettendorf is the third lowest when combining property taxes, storm water fees, sewer charges and solid waste disposal fees for an average homeowner (median home value of $165,260) among 30 Iowa communities of 10,000 people or more.
He also points to the city's Aa1 bond rating in support of the decision to add debt, rather than raise property taxes, to pay for new capital projects.
While investors may feel secure in buying the city's bonds (debt), city taxpayers end up paying more for every new street and municipal improvement since interest costs on the bonds add to the total price of those improvements.