Aldermen approve using fund balance while applying for SRF loan to cover $630,000 CDBG shortfall

Decatur aldermen voted to move ahead on the town's water project using the town's fund balance while simultaneously applying for a State Revolving Fund (SRF) loan as a fallback, after discussion about a roughly $630,000 gap in county CDBG support.

The decision followed extended discussion about timing and financial risk. Council members said the project already faces schedule delays and a 12-month construction estimate once bidding is complete; officials estimated the town may be 18 months behind the original plan. Without clarity on an SRF interest rate or rebate/reimbursement mechanics, aldermen debated how much risk to accept before proceeding.

Why it matters: The water-tank project is time-sensitive and tied to outside grant/loan decisions. Delaying construction for loan approvals could add months to the schedule; using fund balance risks reducing the town's near-term reserves. Council members noted prior reimbursement for submitted claims and discussed whether funds paid now could later be restored if an SRF loan is approved.

Council action and details: Alderman Meadows moved, and Alderman Myers seconded, a motion to "move forward with using the fund balance but apply for the SRF" so that work can proceed while the town pursues loan funding. The motion carried.

Officials acknowledged several unresolved financial mechanics: the SRF interest rate and principal amount had not been set at the meeting, and the town staff said they would check whether costs already paid from fund balance are reimbursable if the loan later arrives. A town official noted county reimbursement has been received on several prior claim submissions and that about $80,000 of the claims invoiced were county funds processed through the county's claims system.

Council members emphasized caution: they instructed staff to verify whether expenditures paid from fund balance could later be replaced if SRF funds are secured, and to return with the specific loan terms before fully committing to replacement of fund balance with loan proceeds. The council did not set a definitive repayment schedule or interest threshold; those details will depend on the SRF award and vendor timelines.

Next steps: Staff will inquire about SRF terms, whether paid expenses are reimbursable, and the timing for loan awards; the council will consider those details when they become available. The council also discussed the project's construction timeline and the practical implications of further delay.

Provenance: topicintro: SEG 065; topfinish: SEG 236.