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Erwin board mulling over the numbers for debt restructuring and new outlay

Sue Guinn Legg • Updated Jul 12, 2018 at 9:29 PM

ERWIN — The Erwin Board of Mayor and Aldermen is mulling over the numbers and expects to make a decision next week on options for debt restructuring and a new capital outlay to cover nearly $750,000 in expenditures, including police cars and fire trucks.

Steve Queener, a marketing representative for the Tennessee Municipal Bond Fund, presented the board with the options on Thursday.

Queener said that while the decision is ultimately up to the board, the TMB’s proposal is for a short 2- to 4-year extension on the maturity of two of the town’s three existing capital outlay notes totaling $1,327,803 and combining that with a new $747,000 outlay.

For the new $2,074,003 total debt, the TMBF offer was a 15-year, 3.95 percent fixed-rate note for which payments would begin in September 2019, saving the town $208,750 in debt service during 2018-19 fiscal year.

On a separate $3.5 million loan used for downtown street, sidewalk and utility improvements, Queener said the lenders had likewise agreed to extend that debt out for up to 11 years for an additional $108,000 in savings on the town’s 2018-19 debt service.

“What we’ve tried to do is free up some money for you this year, extend your maturity a little and get you some (new) money for your capital projects,” he said.

In order to meet the Sept. 1 closing deadline required for 2018-19 debt service savings, Queener said the board would need to pass a resolution of commitment by the end of July.

Town Recorder Glenn Rosenoff suggested the board “take a breather for a couple of days, look at all the scenarios” and make a decision next week.

On the request of Alderman Mark Lefever, Ronsenoff said he would get projections of the town’s total debt service over the next three years to compare to the current annual debt service of $557,199.

Mayor Doris Hensley said, “There are three good scenarios here we can compare.” Hensley also noted the projected savings attached to the new $747,000 outlay was enough to cover “everything we had even wished for the town” in the coming fiscal year budget.

Email Sue Guinn Legg at [email protected]. Follow her on Twitter @sueleggjcpress. Like her on Facebook at facebook.com/sueleggjcpress.

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