Waterloo Council adopts FY2026 budget amendment, advances $6M bond proceedings and approves multiple development measures

The Waterloo City Council met May 18 and approved a set of fiscal and development measures intended to keep city finances and projects on schedule.

Council adopted a fiscal-year 2026 budget amendment required under state law to account for unanticipated revenues and to keep spending within legal limits, City Finance Director Bridget Wood said. The council approved the amendment after a public hearing at which no members of the public spoke.

The council also instituted proceedings to pursue the issuance of general obligation bonds not to exceed $6 million to fund essential corporate purposes. A resident, Todd Odall, raised a procedural concern after noting the agenda packet mistakenly listed $600,000; staff and the city clerk confirmed the published legal notice stated $6 million and the council proceeded to authorize additional steps in the bond process.

On economic development the council advanced multiple actions. It approved a nonbinding letter of intent and license agreement with McDonald's USA allowing due diligence and site testing at the former Legends site in the downtown block between West First Street and West Mullen Avenue. Tim Lu, representing the property owners, said McDonald’s had entered an offer and would conduct soil and design reviews. Main Street Waterloo and other council members urged caution about compatibility with the downtown mixed‑use vision and asked that the Waterloo Development Corporation and McDonald’s present design concepts; despite that request the council approved the LOI on a roll-call vote.

Council approved several development agreements and incentive packages to encourage rehabilitation and new construction. Those approvals included: - A development agreement and $7,500 incentive for New Air Rentals LLC to rehabilitate a home in the Churchill neighborhood. - An amendment extending the timeline for Cedar River Renaissance LLC’s multi‑phase project while staff and the developer finalize historic‑tax‑credit work. - A development incentive package and a $43,000 acquisition reimbursement for E & A Properties LLC tied to construction of a 10,000‑square‑foot commercial building; staff said the incentive is structured to be paid upon completion and that the city expects the net tax return to exceed the incentive within the intended payback window.

Council also considered acquiring three adjacent, heavily dilapidated parcels on Lafayette Street for $60,000 to clear the site for redevelopment and to avoid piecemeal ownership constraints. Several residents urged the council to use the city’s 657A condemnation authority instead of paying the owner; staff said 657A had been discussed for portions of the site but that partial condemnation left redevelopment constraints. After debate the council voted to table the acquisition (item 7) for two weeks so the city attorney can examine more economical options; separate routine encroachment and easement items (items 8 and 9) were approved.

Experience Waterloo’s hotel/motel tax grant recommendations were presented to council by board member Nick Hedrick, who said the board uses a scoring calculator that weights “heads and beds,” event length and projected return to the community. Council asked for greater clarity on how individual events were scored; staff noted the packet contains per‑dollar return figures for each awarded event.

Public‑works items included the council’s approval to submit an intended‑use plan to the Iowa Department of Natural Resources for an Airline Highway lift‑station and force‑main project and approval of professional services and a construction contract for an emergency East Side sanitary‑sewer repair. The council also adopted an ordinance increasing sewer rates and transitioning water/sewer/garbage billing to monthly cycles; staff said the change is intended to align utility billing with monthly water usage.

Residents used the public‑comment period to press a range of issues. Several speakers urged continued local investment in a fully staffed human‑rights office, asked for greater transparency on the proposed new city‑hall project and development incentives, complained about sidewalk assessments, and submitted petitions on traffic‑safety and due‑process initiatives. At the sidewalk hearing resident Dana Davis said she disagreed with a repair notice for her property and asked how inspections and assessments are explained to homeowners; City Engineer Jamie Kudson explained the city inspects sidewalks on a 12‑year cycle and that adjoining property owners are responsible for repairs with installment options available through property assessments.

Votes of note: - Fiscal‑year 2026 budget amendment: adopted (roll call). Finance Director Bridget Wood said the amendment keeps the city in compliance with state law. - Runway rehabilitation (FAA AIP project): council authorized proceeding and referred bids to the director of aviation for review after bids were read into the record. - Sale of a small parcel to R&M Properties LLC for $500: approved (roll call). - Proceedings to issue up to $6 million in GO bonds (2026A): instituted (roll call) after staff confirmed the published notice cited $6 million. - Experience Waterloo hotel/motel grant recommendations (packet item 8): approved by roll call with discussion about scoring; council asked staff to ensure documentation of scoring by event. - Acquisition of three Lafayette Street parcels (item 7): tabled for two weeks to allow additional legal review; items 8 and 9 (encroachment and temporary easement) approved. - McDonald’s LOI for downtown parcel (item 10): approved (roll call) despite several councilmembers requesting a more detailed presentation from WDC and McDonald’s in the near term. - Sewer ordinance increasing rates and moving to monthly billing: passed on second/third reading (roll call).

What’s next: the council scheduled follow‑up on the tabled Lafayette Street acquisition while staff will proceed with bond‑issuance steps, grant documentation and the SRF funding application work. Several council members asked for presentations from the Waterloo Development Corporation and McDonald’s representatives at a future meeting to review design and compatibility with downtown plans.