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Oxford board approves $25 million draw-down note to back storm-recovery costs
Summary
The Oxford Board of Aldermen voted March 17 to award a draw-down emergency note up to $25 million to Trustmark Bank to ensure cash flow for storm-recovery expenses; the board said it will draw only as needed while pursuing FEMA and MEMA reimbursements.
The Oxford Board of Aldermen voted March 17 to award an emergency draw-down note of up to $25 million to Trustmark Bank as a funding vehicle for storm-recovery expenses tied to the January storm.
Mayor Matt said the city expects storm-recovery costs for debris pickup, debris monitoring and electric-grid repairs to exceed $20 million and that reimbursements will be sought from federal and state sources. "FEMA pays back at 75% and MEMA at 12.5% and then the community is responsible for an additional 12.5%," the mayor said as he described why an interim financing option is needed. Finance staff Sue told the board Trustmark was the low compliant bidder at 4.51% and asked the board to award the note so the city has the option to borrow if necessary. "The note could be repaid from any source," Sue said. "You only pay interest on the amount drawn." The board approved the award by motion and voice vote.
Why it matters: The note is a contingency mechanism to ensure the city can pay vendors before reimbursements arrive. Mayor Matt told the board the city has used reserve funds so far but faces roughly $7 million in bills coming due in early April, increasing the urgency for a borrowing option if state or federal reimbursements are delayed.
What happened: The board authorized awarding the draw-down note to Trustmark Bank at the 4.51% bid rate and directed staff to proceed with validation, which Sue said is scheduled for March 30. Several members noted the city will avoid drawing on the note if possible.
Next steps: The note validation was scheduled for March 30; if validated the city may draw as needed and repay the note using FEMA/MEMA reimbursements, a state loan if available, or other sources.
