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Tenino council approves two-year deferral on Ag Park curb loan to ease cash flow
Summary
Council approved a two-year deferral on a $1.25 million curb loan tied to the Ag Park, which shortens the loan term and modestly raises annual payments but gives the city breathing room to build cash flow and collect rental income.
Tenino's council on June 10 approved staff's request to seek a two-year deferral on a $1.25 million curb loan for the Ag Park project, a move staff said would provide near-term cash-flow relief.
Staff said a deferral request must be submitted by the twelfth of the month to be granted and that a two-year deferral would shorten the loan term from 20 to 18 years and increase payments modestly because the loan's end date cannot be extended beyond the original maturity. The combined annual payment for the two linked sewer/curb loans was described in discussion as roughly $67,000 per year; staff indicated the interest rate on the curb loan is below 3%.
Supporters said the deferral would allow the city to build up rental revenue from Ag Park tenants and avoid making a large lump payment while other loans mature in coming years. One council member said aggressively paying down restricted loans over the next three years will free up funds for future debt service and matching grants.
The motion to approve requesting the two-year deferral passed by voice vote. Staff will submit the letter and report back on the adjusted amortization schedule and monthly/annual payment changes.
