Willis started off the called work session Tuesday proposing that the city borrow $550,000. Over the course of more than two hours, the loan proposal ballooned as high as $1 million before the council compromised at an $813,000 figure — one that appeared to please neither the more conservative council members, nor the more ambitious.
The council did not vote on the loan Tuesday. Willis said he would take the $813,000 figure to different banks in the upcoming weeks to discuss a possible loan or municipal bond.
The estimated repayment for the loan would be roughly $70,000 annually for 15 years.
The much-discussed loan had been looming over council talks for months, and $50,000 had already been set aside in this year’s budget for a payment. The council plans to use the loan to buy new equipment for the Public Works Department, repave Jacksonville Street and make improvements to the city park.
The mayor set aside $100,000 in his proposed plan for city equipment, but that number jumped to more than $300,000 when Councilman Jeff Clendenning and Public Works Director Joey Conger offered the council their wish list, including a new tractor and backhoe.
“This is what I’m going to need if you want me to do my job,” Conger said.
Councilman Mike Warren suggested borrowing $1 million — thereby eliciting an expression of surprise from the mayor — and setting aside close to $200,000 for commercial development. Councilwoman Ellen Cole backed Warren’s suggestion, but it was met with skepticism by Councilman Les Hill.
“We have to step out,” Cole said.
“But you don’t want to overstep,” Hill responded.
Hill questioned if employees would have to be laid off if the city failed to make a payment on the loan. Hill said he’d like to see the city borrow no more than $500,000. Councilman Tim McRae also said he was concerned with borrowing too much.
Warren, however, said the city had been in a worse place financially the last time the council took out a $1 million loan, and was still able to make all its payments.
“Whenever we borrow money, it’s never enough,” Warren said. “We always need more.”
A $1 million loan would mean a $90,000 annual payment. Willis asked City Clerk Teresa Dishman if the city could afford that.
“I’m not going to go out on a limb and say, ‘Yes we can,’” Dishman said. “I’d have to say no.”
Willis said he’d be willing to go with the $813,000 figure, taking out $20,000 from the annual budget going to capital expenditures to make payments, if Clendenning and Warren agreed to keep intact the $125,000 he proposed for park improvements — a pet project of the mayor’s.
The council is set to meet again on Nov. 12.
Staff writer Brian Anderson: 256-235-3546. On Twitter @BAnderson_Star.