Title
Approving a resolution to accept a ten year financing term for equipment purchases not to exceed $500,000.
Summary
The FY 23 budget includes assumptions to borrow funds for the purchase of a wastewater vacuum truck. In order to close the loan, Council must approve a resolution authorizing the City to enter into a debt agreement. The terms of the agreement are not to exceed $500,000, to be paid back within 10 years at 3.9% interest.
The resolution approved on January 24th included bank qualified interest rates that limit the City to issue less than $10 million of tax exempt bonds. Removing the tax-exempt bond language and restrictions resulted in a small rate increase. This rate is still the lowest of quoted rates. The rate was 3.85% and is now 3.9%.
Prior City Council Action
Purchase of vacuum truck approved November 29, 2022
Reimbursement resolution approved January 10, 2023
Prior resolution approval on January 24, 2023
Deadline for City Council Action
Approval requested February 14th to insure the loan is closed on February 15th.
Funding Expected: Revenue __ Expenditure __ N/A __
Budgeted Item: Yes __ No __ N/A __
Amount: _$500,000_______
1295 Form Required? Yes _X_ No __
Legal Review Required: N/A __ Required _X_ Date Completed: ___02/07/2023________
Supporting documents attached:
Resolution
Loan Terms
Recommended Action
Approve the resolution to accept a ten year financing term for equipment purchases not to exceed $500,000.