Tuesday’s Carthage City Council will feature the first use of a new policy allowing the city to loan itself money.
The council will consider a resolution to allow the landfill closure fund to loan the city a little more than $600,000 to buy a new fire truck and storm sirens.
The landfill closure fund, which is anticipated to have $914,904 as of July 1, 2012 according to the 2011-2012 city budget, was set up as a contingency fund to pay for any further maintenance or repairs on the now-closed construction and demolition landfill on Macon Street.
The landfill was on the current site of the Carthage Recycling Center.
City Administrator Tom Short said the fund received money from a monthly solid waste assessment of $1.17 on every trash bill, but the fund hasn’t been used, according to the city’s budget, since fiscal year 2009 when $4,711 was taken for a capital outlay.
Short said the last time anything big came from the fund was in 1987 when more than $400,000 was spent on remediation and cleanup of the landfill.
The fund has been accumulating money at a rate of $60,000 to $65,000 each year since fiscal year 2009. Federal law requires that the city maintain the fund
Short said the city is liable for any problems at the landfill for 30 years after the closure, which happened in 2004.
According to the terms to be voted on Tuesday, the landfill fund will loan the city $422,000 for a new fire truck and $180,000 for new storm sirens.
The loan will be repaid over three years, at an annual interest rate of 0.84 percent, from the fire safety sales tax proceeds.
Short has said in the past that the “Inter-fund loan policy,” as enacted at the Feb. 14 council meeting, will allow the city to loan itself money from contingency funds such as the landfill fund, at interest rates much cheaper than if the city borrowed from a financial institution.
He said interest rates are so low now that these funds aren’t earning much in interest income, so the inter-fund loans are a better use of the money than sitting in the bank.
“It will actually save us money when compared to borrowing money at an interest rate of 3 percent or more,” Short said.
Also on the agenda, Fire Chief Chris Thompson plans to recommend, pending a decision on Monday from the council’s public safety committee, that the city accept a bid from Fire Master Fire Apparatus in Springfield, for a new engine at a cost of $404,696.
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The proposed contract with Fire Master calls for the truck to be delivered within 180-210 calendar days after the contract is signed.