CITY AGREES TO LOAN AGREEMENT
(Atlantic) The Atlantic City Council officially entered into a $3.1 million loan agreement with Ruan Securities for the City’s 2011 Capital Improvement Program Wednesday night.
The Council voted 4-2 for the agreement that provides for a negotiated sale of bonds and would serve to lock in interest rates now rather than wait a month to go out for public sale to avoid increasing interest rates. Chip Schultz, of Ruan Securities, says the total interest cost is 3.25%.
“After this debt is in place the city will be at 46 percent of its debt capacity with 54 percent remaining, so still at a good low debt burden amount so things look solid from that stand point,” said Schultz.
Pat Simmons and Kern Miller voted no.
“I was quite shocked when it came right down to we’re paying over 900-thousand dollars interest and on the bond issue is a 25-thousand dollar gift to Iowa Western Community College and yet we’re going to pay interest on that, plus some sidewalks up to the city park that’s going to be replaced, we had a sidewalk program that was working, and in the last 4, 5, 6, 7, 8 years we’ve done a lot of sidewalks and now we’re going to pay interest on that,” said Kern Miller.
Dana Halder, Steve Livengood, Shawn Shouse, and Kathy Somers voted in favor of the loan. Linda Hartkoph was not present for the meeting.