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Council hears USDA Rural Development timing will require interim financing and possible rate increases
Summary
Rose Creek officials were told USDA Rural Development grant funds will not be available until after project construction, meaning the city must seek interim construction financing and may need to raise utility rates; an engagement letter must be signed and RD representatives will return after the audit to answer questions.
At the March 2 meeting the Rose Creek City Council was briefed on the timing of USDA Rural Development (RD) funding for an upcoming project and the financing implications for the city.
Minutes state that RD grant dollars will not be available until after the project is fully constructed. As a result, the city will need interim construction financing and likely will need to increase rates to cover carrying costs during construction. The minutes note that an engagement letter related to financing needs to be signed; once the engagement letter is received and the in-house audit is completed (March 4–5), RD representatives will return to a council meeting to answer questions.
The council did not set specific borrowing terms or a rate-change amount during the meeting; the timing and size of any rate change were not specified in the minutes. The council’s next steps per the minutes are to complete the audit and receive the engagement letter before holding further discussions with USDA RD representatives.
