Erwin board continues work on budget and financing options

Sue Guinn Legg • Jun 26, 2018 at 7:52 PM

ERWIN — The Erwin Board of Mayor and Aldermen is continuing to explore options to restructure the town’s debt in hopes of capturing several hundred thousand dollars in savings for capital expenditures.

Monday’s work session for the 2017-18 budget began with some rethinking of a refinancing plan for town’s estimated $5.5 million in fixed and variable rate loans.

Earlier this month, the board members came to a consensus on their preference for a debt restructuring and new financing to cover the estimated $600,000 cost of needed vehicles and equipment for the town’s police, fire and public works departments.

Options for refinancing discussed at that time included the transfer of several variable and fixed rate loans into a single fixed-rate loan offered by private financing company in Knoxville at 3.5 percent or less for a projected savings of more than $200,000 on the town’s annual debt service.

On Monday, Mayor Doris Hensley cited a variable rate of 1.9 percent and fixed rates of 4 to 5 percent and said refinancing at the variable rate of 1.9 percent would save the town approximately $272,000.

“We could save $272,000 by going to variable rate at 1.9 percent. Or at set rate we would be paying 4 to 5 percent forever,” she said.

Hensley suggested the board continue looking at refinancing options with the Tennessee Municipal League Bond Fund that currently holds the town’s loans.

Town Recorder Glenn Rosenoff scheduled a meeting with the TML Bond Fund for Monday, July 2.

As is, Rosenoff said, the town has budgeted $557,198 for debt service for the next fiscal year but can rework the budget to reflect any savings realized through a restructuring of the existing debt and new debt incurred for large capital expenditures discussed in previous budget work sessions.

The board has previously discussed approximately $600,000 in unfunded capital expenditure needs, including two new police cars, a fire engine and fire department rescue truck to be funded through a bond issue rather than a property tax increase.

On Monday the board turned its attention to funded and unfunded street improvements included in a strategic replacement scheduled being followed by the Public Works Department.

The plan includes approximately $140,000 budgeted for the paving Harris Hollow and Temple Hill roads and three secondary street paving projects that Public Works Director Rikki Forney said may include Elm Avenue and Second and Third streets to Main Avenue. The public works budget also includes $37,000 for a new all-purpose truck.

Discussion of the Park and Recreation Department’s budget included bridge replacements on the Erwin Linear Trail and at Rock Creek; an $18,000 resurfacing of the tennis courts at Fishery Park versus the construction of new tennis courts near the county high school; the annual sandblasting of the swimming pool at Fishery Park versus a major renovation of the pool that could save the town the pool’s annual maintenance cost; and a new concrete foundation for the Fishery Park gazebo.

While many of the park and rec expenditures are not included in the projected 2018-2019 budget, those items could be rolled into a bond issue for the public safety vehicles.

Jamie Rice, community relations coordinator for the town and president of the RISE Erwin professional organization devoted to enhancing business and tourism activity in the community, told the board Erwin Utilities’ donation of land for a mountain bike park had caused her to shift the emphasis of her funding request to the development of that park.

Rice has also presented the board with conceptual plans for a downtown farmer’s market pavilion and for a downtown wayfinding signage, including a large “Welcome to Erwin” sign to be placed over the roadway on the Second Street (Tenn. Highway 107) corridor from Interstate 26 to the Main Avenue.

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