David O’Mary of First Bank of Jasper, the bank expected to lend the money needed by the city, talked to the Council Friday about Jasper officials’ desire to set up gradual repayment of the funds in three different plans to help city hall record keepers stay abreast of the rate of amortization.
The city wants to pay off portions of the money it borrows over five-, seven- and 10-year periods. Officials have said at recent gatherings of the Council that the city does not want to take 10 years to payoff an item that won’t last that long, such as a patrol car.
Alan Zeigler, a legal representative of First Bank of Jasper, suggested the city set up one line of credit that could be internally divided.
“There will be clear schedules in the arrangement to show that portion of the debt was allocated to the police cars and was paid off in three years,” Zeigler said. “You as a council can say four years from now ‘we have no debt referable to these police cars.’”
Despite the recommendation, Mayor Sonny Posey said he still likes the idea of keeping the money being borrowed from the account in three individual accounts. “To me, it’s a safety feature so we can see where we are,” he said.
Zeigler said the city’s audit can have the borrowed money reflected as three different obligations with the purpose put in parenthesis, if necessary.
Items the city plans to spend the borrowed money on, and the expected cost, are as follows:
•New pool project construction — $250,000;
•Miracle Field construction — $350,000;
•New park development in District 2 — $120,000;
•Purchase of BBt vehicle — $140,000;
•Purchase of trucks for Street Department — $75,000;
•Purchase of a Tiger mower — $125,000;
•Purchase of Cat Loader — $40,000;
•Purchase of garbage truck — $200,000;
•Purchase of turnout gear for fire department — $36,000;
•Purchase of bay doors — $15,000;
•Purchase of telephone equipment— $20,000;
•Purchase of computer software — $170,000;
•Purchase of body armor — $10,000;
•Purchase of fencing — $20,000 and
•Purchase of five police patrol cars — $135,000.
On Tuesday, Posey is expected to ask the Council for permission to order the vehicles during a regular meeting.
The vehicles being purchased for the Public Works department includes a $27,000 Chevrolet Tahoe, a $17,000 Jeep Liberty, a $16,000 Chevrolet Colorado Truck and a $16,500 truck made by either Ford or Chevrolet.
The police cars will all be Chevrolet Tahoes that will each come with a police package.
Originally, the city planned to take out a loan to pay for the items. However, they seemed to agree with Zeigler’s recommendation that they instead open a line of credit because it would reduce the cost of repayment.
“This way you will not be borrowing the money until you are ready to spend it,” Zeigler said.
City Clerk Kathy Chambless said the city expects to pay an interest rate of about 2 percent for the funds it borrows from First Bank of Jasper.
O’Mary said Friday he did not have a figure to give the Council regarding the total amount the city is expected to pay in interest from the funds it will borrow.
Zeigler said Jasper will be required to adopt an ordinance authorizing the issuance of a general obligation warrant in order to open the line of credit.