Iola Council members agreed to postpone for one year any decision on rebuilding U.S. 54 Highway through town.
The project had been set to begin this spring, but new cost estimates put it beyond their immediate reach.
“We’re going to ask you to table this discussion,” Iola City Administrator Matt Rehder asked council members at their meeting Monday night, adding, “The projected bond payments for the increased cost to the project is going to exceed our revenue to pay the bond payment itself.”
Rehder said he and Assistant City Administrator Corey Schinstock learned this information at noon on Monday and will need time to talk to the Burns & McDonnell engineers to figure out a new plan.
The city’s limit on the debt payment is approximately $750,000. With this kind of limit, the project would need to be in the ballpark of $11-$12 million. In 2022, the council expected the cost for the road rebuilding project to be approximately $13 million. The new estimate is $22.5 million. Suggested reductions could whittle it down to $17 million — still over the amount allowable for the debt payment.
“Now, we’d have to go from $17 million to $12 million, and that’s cutting some pretty serious bones,” Rehder stressed. “Frankly, we think any discussion of cuts now is premature.”
Rehder said any plans will require months of discussion and that “We’re just not ready to have this talk right now. If we can’t afford a project, there’s no need to talk about making cuts already.”
The council originally planned to utilize sales tax revenues to retire general obligation bonds over 30 years for the rebuild. At that time, the anticipated annual bond payments were $500,000.
Mayor Steve French suggested the council table the item for a “minimum of one year,” citing an increasing yearly Pavement Surface Evaluation and Rating (PASER) score and uncertainty with the economy and interest rates going forward with the upcoming election year. He added, though, the council should continue to review the item over the next year. “By having this added to pending agenda items, we can have information brought back to us as needed,” he explained.
FRENCH also suggested council members and city administrators “flood the federal government and state” with letters and point out the issues and concerns small communities have.
Schinstock said that “Ultimately, the road project needs to happen. I’ll stand behind that 100%. I don’t know how we skin this to get it to the right point, but it’s not going to change the fact that the road base is terrible.”
Schinstock said they would need to find a temporary fix for the steel plate on the highway in front of Casey’s convenience store. “I’m going to try to put Burns & McDonnell on that and see if there is some alternative we can do,” he said. “We were holding off with that thing, just trying to wait until we broke ground next year and obviously that’s not going to happen.” 
Noting his agreement with tabling the item, council member Nicholas Lohman added he assumed the project would be interest rate sensitive. Rehder confirmed this was the case and stated the project’s payments are currently based off of a 4.7% interest rate and initial projections in March of 2021 had interest rates at 1.7%.
The council unanimously approved to table the 54 rebuild discussions for one year and will review the items over the coming year.
In other news, the council unanimously approved the renewal of Cereal Malt Beverage (CMB) licenses for El Jimador, Pizza Hut, Denny’s Sports Center, China Palace, Pete’s, Walmart, Casey’s, G&W Grocery, and Dollar General.
