City approves restructuring of debt
By Julie Fann
Star Staff
jfann@starhq.com
The Elizabethton City Council on Thursday
approved that $11.5 million of water and sewer debt be re-financed
and extended for 10 years by using short-term and long-term
bonds. City finance director Brad Moffitt explained that restructuring
the debt was necessary to get the city in compliance with
state mandates. Otherwise, there would have been a large increase
in expenses during the next five years.
The re-financing will decrease the expenses in
the short-term and extend them over the next 30 years. Rick
Dulaney, managing director of public finance for Morgan Keegan
and Company, based in Nashville, presented the plan to council
members. He said one of the perks of the plan is that it uses
capital appreciation bonds that allow the borrower to manage
cash flow.
Council member Richard Sammons was concerned
over the high interest rates involved. Sammons said he believed
the re-financing would mean taking advantage of lower interest
rates, and he didn't think that was going to happen.
"What we are doing is buying time, and paying
a high price for it," he said.
Mayor Sam LaPorte explained that the re-financing
involves consolidating old and new debt, which includes the
Big Springs Project. He said it is also driven by the expected
loss of nearly $200,000 each year from the closing of the
Alcoa plant in June.
Also at Thursday's meeting, The American Legion's
local Korean War veterans, Post #49, donated $1,000 for the
construction of the Veteran's War Memorial. The memorial will
be built at the corner of Elk Avenue and Pine Street in Elizabethton
to remember all veterans who died in combat in all wars.
"On behalf of those who made a supreme sacrifice
for our country, we thank you and your organization," said
Dave Ornduff, Director of Planning and Development for the
city.
Prior to discussing new issues, City Manager
Charles Stahl discussed a letter from the state Department
of Transportation requesting that Lynn Avenue to G. Street
be repaired. The city also received a letter requesting that
Elizabethton Airport Road and Highway 91 be improved.
Ann Rogers, guidance counselor for Elizabethton
High School, informed the council that April 19 will be Student
Government Day, the first since the 1970s. On that day, students
work with City Council members to create their own "mock"
city government.
The City Council also:
* Approved the Doe River Rehabilitation Project
to repair the Elk Avenue Bridge. The city will pay 20 percent
of the project, and the state will pay the rest. Right now,
$2,660 will be deposited to secure engineering.
* Approved a resolution for the State Highway
Maintenance contract for the fiscal year 2002-2003.
* Authorized the State of Tennessee 2002 Library
Services Technology Act Grant to provide $1,200 toward computers
in the Elizabethton Public Library.
