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Committee approves State Trust Fund loans for DPW bucket truck and Oshkosh Street project
Summary
The Finance Personnel Committee approved requests to borrow $214,000 for a DPW bucket truck (3-year note, ~5.5% interest; general fund/tax roll) and $386,000 for the Oshkosh Street project (10-year note, ~6% interest; paid from TID increment). The loans will be submitted to the state for disbursement.
The Finance Personnel Committee voted to request two State Trust Fund loans to cover vehicle and street work costs, sending resolutions to the full council for final approval. Finance Director Judy presented the loan request paperwork and related resolutions and said the state reserves the funds once requested. The first loan is for $214,000 to purchase a Department of Public Works bucket truck. The committee approved a three-year note and committee members noted the interest rate of about 5.5 percent. Judy said those payments are general fund obligations and will be included on the tax roll. The second loan is for $386,000 for the Oshkosh Street project. The committee approved a 10-year note, and members referenced a roughly 6 percent interest rate for the longer-term loan. Judy said the Oshkosh loan will be paid from a TID (tax increment financing) district rather than the general tax roll; she explained that a portion of the project was paid by the sewer utility and the remaining eligible portion can be charged to the TID. Committee members and the auditors representative said they had consulted with the citys financial advisor (Ehlers), who suggested the state trust fund loan option because projects below $1 million avoid the costs and fees associated with bond issuance. Motions to borrow were made and seconded on the floor. The motion to borrow $214,000 for the DPW bucket truck was made by Tim and seconded by John; the motion passed with unanimous "aye" votes. The motion to borrow $386,000 for the Oshkosh Street project was made by Bob and seconded by Mike; that motion also passed with unanimous "aye" votes. Judy said once the committee forwards the resolutions, the state board meets and the funds are disbursed to the city. The committee discussed term length options and the need to monitor TID performance; Judy said if the TID performs well in future years the city can consider early payoff. She also said staff had coordinated with auditors to confirm that charging the eligible portion to the TID was appropriate for this project. The committee's decision replaces a planned bond issuance; Judy said the switch to the state trust fund loan avoids bond issuance fees for amounts below $1 million.
