LINCOLN -- The city of Lincoln will borrow $140,788 from Simmons Bank to purchase a new trash truck, although one City Council member objected to the city taking out another loan.
Lincoln City Council last week unanimously voted to purchase a 2020 New Way Cobra trash truck for $140,788 from Doggett Freightliner and then voted 6-1 on a resolution to authorize the city to borrow the money with a five-year loan.
City Council member Johnny Stowers, noting the city is still paying off a loan for another trash truck, wondered why the city could not use money from its reserve capital improvements fund to pay off the first loan or pay cash for the new truck.
Stowers pointed out the city's capital improvements reserve fund has about $500,000 in it, enough to pay for one of the trucks.
"There's no sense paying interest to the bank when we have money in the bank," Stowers told council members.
Rhonda Hulse, business manager, said the city owes $79,000 for the first trash truck and should pay off the loan in 2 1/2 years. The interest rate on that loan is 3 percent. The payment is $2,233 per month.
The interest rate for the new truck should be around 4.25 percent, and Hulse said the loan payment for the new truck is in the 2019 budget. The city budgeted $2,333 per month for the payment.
Mayor Doug Hutchens said he also prefers to use cash but pointed out the city should have a "comfort level" for its reserve fund in case of an emergency.
"It's taken years to bring it to a point that we have cash in place for a catastrophic event," Hutchens said.
He added that the city anticipates future expenses to include improvements to the sewer system.
"Three hundred thousand dollars doesn't go very far in the scope of fixing a sewer problem," Hutchens said.
Hutchens suggested the City Council in future meetings might come up with policy guidelines on a minimum amount for the city's reserve fund.
"Does that answer your question?" Hutchens asked Stowers.
"It answers the question but I'm totally uncomfortable with increasing our debt load the way we are," Stowers replied.
Stowers voted against the resolution. Council members Terry Bryson, Pam Christian, Doyle Dixon, Doug Moore, Bobby McDonald and Troy Myers voted yes. Gary Eoff was absent.
The council's March 19 meeting followed a special council meeting on March 13 in which the city issued $4.5 million in bonds for a new water storage tank. The city will pay off this debt with a rate increase for all water customers.
In other action, council members approved an ordinance to establish operating procedures for council meetings.
The most recent version of Robert's Rules of Order will be used at City Council meetings with the city attorney appointed as the parliamentarian to give advice on questions of order.
The new procedures allow a 15-minute public comment period for all regular council meetings. Citizens will be allowed to speak up to three minutes on any subject related to city business. Anyone who wishes to speak will be asked to sign up before the meeting starts. A person can only speak one time during the public comment period.
Any comments are to be addressed to the City Council as a whole, not to individual council members or city officials.
The procedures spell out general conduct for people attending council meetings.
According to the ordinance, "Stamping of feet, whistles, yells, shouting, physically threatening conduct and/or similar demonstrations are prohibited."
The ordinance prohibits personal attacks on anyone, use of profane language and signs or displays of disrespect for individuals.
The City Council also approved a resolution to pay $50,000 to partially reimburse Lincoln Rural Fire Department for the purchase of 20 air packs. The Council agreed last year to help with the cost. The total cost was $125,660.
Hulse said the city will use money left over in its fire truck fund to pay for the air packs.
Hutchens referred two issues to the Committee of the Whole. One is an ordinance to adopt rules and regulations governing City Council committee meetings. The other would deal with door-to-door solicitation.
For February, the city received $23,124 from sales tax revenues. Of this, about $7,000 goes to the library and $1,700 to parks and recreation.
General News on 03/27/2019
Print Headline: Council Approves Bank Loan For New Trash Truck