Peosta council hears $8M–$10M financing options for Highway 20 interchange, approves multiple project contracts

Spirit Financial representative Maggie presented financing scenarios showing the City of Peosta’s potential cost-share for a proposed Highway 20 diamond interchange could range from $8 million to $10 million and outlined how that borrowing could overlap with the city’s Cap Drive project.

Maggie told the council the city’s example schedules assumed a 15-year repayment and that the city might use a mix of general-obligation, revenue and SRF (State Revolving Fund) financing. “We were looking at the options of $8,000,000, $9,000,000 and I think $10,000,000 for that diamond interchange, meaning that would be your cost share of that project,” Maggie said. She added the analysis assumed a conservative taxable-valuation growth rate (about 1% every other year) and showed the debt-service levy could be higher during years when Cap Drive and the DOT project overlap.

Maggie also described a hypothetical use of roughly $250,000 a year in other local revenues (for example local-option sales tax) to reduce the levy impact and said taking a larger local cost share could speed the DOT’s scheduling of the project. “If you give them a number, and it’s a number that they like, that may speed this project up on their time frame,” she said.

Council members asked about debt capacity, growth assumptions and the peak portion of the debt-capacity curve; Maggie said she would follow up with the precise percentage for the worst-case overlap period.

Votes at a glance

- Appointment: Eric Osterman — resolution to appoint Eric Osterman to the Peosta zoning board of adjustment for a term ending in 2031; motion carried. (SEG 610–636) - Ordinance: Responsibility of legal guardians — council approved an ordinance amending the city code pertaining to guardianship responsibility; motion carried. (SEG 1270–1362) - Change order: Cap Court lift station (Change Order No. 2) — approved; staff said the change results in a net deduct of $6,000. (SEG 1363–1396) - Resolution: Water system improvements PSA — approved; staff explained an unexecuted 2022 agreement and an amendment to include additional scope and labor (amendment amount discussed as about $60,000). (SEG 1396–1443) - Resolution: Cap Drive design and bidding PSA amendment — approved; amendment increases the contract roughly $249,000 to include utility and main-station upgrades. (SEG 1444–1466) - Kelly Oaks Park change orders (Martin Gardner Architecture, multiple COs) — multiple change orders approved after discussion about a bathroom venting detail; motion carried. (SEG 1480–1650) - Pay estimates: Kelly Oaks Pavilion (Pay Estimate Nos. 6 and 7) — approved. (SEG 1650–1680) - Vacation/transfer of real estate/alley (Tennessee) — approved. (SEG 1681–1695) - Final plans/specs/cost estimate for Cap Court lift station (SRF compliance) — resolution approved for SRF submittal. (SEG 1696–1772)

Why it matters

The council’s discussion frames how two large projects — the locally driven Cap Drive reconstruction and a potential state-led Highway 20 interchange — could intersect in borrowing timelines and levy impacts. The Spirit Financial presentation gave council members a fiscal picture of overlapping debt service and trade-offs between faster DOT scheduling and higher near-term levy impacts.

Council next steps and follow-up

Council asked staff and Maggie to provide follow-up details, including the peak percentage of debt-capacity used in the overlapping scenarios and further clarification of growth assumptions. Staff also continued routine project approvals that keep Cap Drive, the Cap Court lift station and Kelly Oaks pavilion moving toward construction or closeout.