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Commission amends Lemmon SIB loan to up to $3 million with 10-year term and security conditions
Summary
The Commission approved an amended State Infrastructure Bank loan for the City of Lemmon up to $3,000,000 at 1.5% interest amortized over ten years, contingent on an acceptable debt service reserve account and a $500,000 letter of credit.
The Commission voted to amend the City of Lemmon’s SIB loan to provide up to $3,000,000 for expanded street improvements after the city reported a prior bid came in roughly 30% higher than estimated. Director Mike Behm outlined the Department’s concerns about securing repayment and suggested bonding or a debt service reserve account; he said the loan repayment would be at 1.5% compounded annually and amortized over 10 years.
Chad Abel, listed in the meeting materials as representing the City of Lemmon, said the city had received a single bid that was about 30% higher than estimated costs for the smaller project and explained expanding project limits could attract more or better bids. The Commission’s amended loan required the City of Lemmon to establish a debt service reserve account acceptable to the Department and to provide a $500,000 letter of credit acceptable to the Department’s legal counsel. The motion to amend the loan was made by Commissioner Lynn Jensen, seconded by Commissioner Larry Nelson, and passed by roll call vote.
