10/01/2001-4B-Minutes-RegularMINUTES: 48 CORPORATION
OCTOBER 1, 2001
PRESENT: Steve Hollingsworth, Beverly Branch, Glenn Ervin, Terry Jones, John
Payne, Randy Thompson
ABSENT: Nel Armstrong
OTHERS
PRESENT: City Manager Jack Smith, City Secretary Rose Chavez, Eddie Branham
1. Beverly Branch Called Meeting to Order.
2. Citizen's Input
None.
3. Consider and Possible Action to Expend Funds for the Completion of the
Infrastructure to the Wal-mart Distribution Center.
City Manger Jack Smith indicated the City received a 1.5 million dollar grant for
Infrastructure to Wal-Mart. The total package came in over that amount, and they
are requesting that the 48 Board help with these funds. It will be $350,00.00 rmanced
for 10 years at $3578.00 per month. The interest rate is 5%.
Brief Discussion.
City Manager indicated the Board currendy has $320,000.00 in the bank.
Steve Hollingsworth asked where the loan would be.
City Manager indicated it would be GNB, it is for ten (10) years with a variable
interest rate that wiU not go below 5% or higher than 7.75%.
Discussion regarding the interest rate and payment amounts.
Steve Hollingsworth asked why they were using GNB.
City Manager indicated that is the City's Depository and they have all of the
information already; however, he can check with the other banks.
John Payne indicated he had been checking on interest rates, and that a 12 month CD
at GNB is earning 4.95% interest. F & M Bank's rate was the same at their grand
opening; however, when he checked again the interest rate was 4.35%. He discussed
with F & M the possibility of matching GNB's rates and they indicated they would.
City Secretary indicated that GNB is the City's and this boards depository and they
can't just go to any bank. The bank was chosen through a bid process.
Discussion regarding the loan and the bank.
John Payne asked why would they want to do a loan if they have $320,000.00. They
could save interest if they used half of the money and then borrowed the other half.
Nel Armstrong indicated part of the funds were allocated for parks.
City Secretary explained that the 4A Board is paying over on their loan to try to
reduce the debt.
Nel Armstrong indicated she would like to see them take out a loan and start paying
the payments, then everything that comes in over a certain amount they could pay on
the note, and pay it off quicker. If they use all of their current funds for this they
won't be able to fund any other projects that come along. The other option would be
to put part of the money down and finance the balance.
Discussion regarding revenues and financing options.
Discussion regarding completion of the park project.
John Payne asked if the 4B Board did not come up with the funds what would the City
do.
City Secretary indicated they would have to borrow the money.
John Payne indicated he would rather the board put $250,000.00 of current funds on
the project and borrow the balance. He indicated that would leave the board with
$100,000 plus the $36,000.00 in revenues that would come in within the next three
months.
Steve Hollingsworth indicated they should borrow $100,000.00, and put $250,000.00
in a CD and tie it to a note. They will still draw interest and only pay 2% on the note.
They will still have $70,000.00 in the account for operating, but would save 3%
interest.
Lengthy Discussion regarding the financing.
John Payne indicated he could not see borrowing the funds if they have the funds in
the bank.
Beverly Branch indicated she did not want to see the board without any money, and
indicated the ball fields will probably cost about $150,000.00.
Steve Hollingsworth indicated they should borrow the $150,000.00 for the park when
it is ready for completion.
John Payne moved that the 4B committee goes ahead and expends $250,000.00
towards the purchase of the infrastructure that is needed and no to secure a
$350,000.00 loan.
City Manager indicated that would only pay $250,000.00, and asked if that was the
intention.
Discussion.
Steve Hollingsworth explained that his idea was to put $250,000.00 in a CD and
borrow $250,000.00 against it. Then take out a second not for $100,00.00, and pay
the second note first, along with the interest on the first.
Randy Thompson asked if they decide later on that they need more money for the
park, could they not go to the bank at that time.
Steve Hollingsworth asked if the City was going to pay this money back.
Nel Armstrong indicated the City would not be paying it back.
Discussion regarding use of the current funds for this project.
4. Consider and Possible Action on Resolution for the Borrowing of Funds for the
Completion of the Infrastructure to the Wal-mart Distribution Center.
5. Any Other Such Matters.
6. Adjournment.
Approved