(KNZA)--The city of Hiawatha has secured interim financing for the sales tax street improvement project, paving the way for the project to go out for bid.

City Administrator Mike Nichols informed the City Commission this week that after working with local banks, Morrill and Janes Bank and Trust was the lone bank interested in moving forward with the temporary financing for the project.

The Commission voted to move forward with the bank, with a 2.75 percent interest rate for a two year note and 2.9 percent rate for a three year note.

The Commission was told in March that the city would be required to use private interim financing until the project is completed.  At that time, USDA Rural Development will loan money to the city to pay off the temporary financing.

Eventually, bonds will be issued for the project. The bonds will be paid off with proceeds from a half-cent sales tax approved by Hiawatha voters in 2016.