City could pay off loan seven years ahead of schedule, saving $130,000 in the process
By Randy Parks
With more than $700,000 in the sewer reserve fund, the City of Burns is trying to decide if it would be more frugal to use some of the money to pay off a LOCAP (League of Oregon Cities Capital Access Program) loan or use it to pay down the cost of the sewer lagoon project.
George Wilber from Oster Professional Group, CPAs attended the May 26 city council meeting to explain the savings the city would realize if they used a portion of the funds for the LOCAP loan, and then pay the sewer fund back.
Wilber began by saying that they first had to check Oregon Statutes to make sure it would be legal to borrow from the reserve fund to pay off the loan, and found that they could as long as the required amount of $175,000 remained in the reserve fund.
Wilber then explained that if the funds in the reserve aren’t touched, there would be enough money to pay off the project loan in 2019, or seven years ahead of schedule.
If the city paid off the LOCAP loan, it would leave about $355,000 in the sewer reserve fund, it would take until about 2023 to pay off the lagoon project, and the city would see a savings of about $130,000 over the time span.
Former council member Lee Williams told the council the sewer reserve fund was set up for the purpose of paying off the sewer lagoon project early. “If it was your home you’d sure as hell pay it off,” Williams said. “We (the council) set it up with rate payers to pay it off early. Pay some now, and it would take it off the principal.”
Councilor Linda Johnson asked what amount citizens pay each month to go toward the lagoon project ($3), and if that fee would disappear once the loan is paid back (yes).
The council agreed to discuss the options before making a decision for the next budget.
City Manager Don Munkers reported that he had several meetings with an individual about leasing land near the Burns airport to graze cattle. Munkers said in conversations with the individual and council members, the city had agreed to extend the lease until November, but the individual wasn’t happy with that agreement. Munkers noted that in an effort to try and work with the individual, they even consulted legal counsel to make sure they weren’t going against Federal Aviation Administration guidelines. “Then I heard he made other arrangements, so I guess we’re done,” Munkers said. “He turned down the offer.”
Councilor Craig LaFollette asked that the council consider making the office manager position in the Police Department a city employee rather than a contract employee.
Police Chief Randy Cook said the position is critical to his department’s operation. Cook said if there were no office manager, he would have to take officers off the streets to cover the tasks, and there would be more overtime.
Councilor Johnson said that for years, the city got by just using volunteers in that position. “Financially speaking, I don’t see how we can do it,” she said. “The budget committee was adamant that it wasn’t a smart thing to do at this time.”
LaFollette encouraged the other councilors to visit with the officers about the importance of the position and then determine if it is worth extra cost.
There was also some discussion about whether the City of Hines could help with compensation for the position.
In other business:
• Dwight Ausmus was present to ask for permission to set off fireworks near the lagoons on July 4. The council agreed by consensus to grant permission;
• LaFollette reviewed some changes the search committee made in the fire chief’s job description, including more specific qualifications. The job will be advertised, and interim chief Stuart Yekel recommended that the council hire someone from the local area if possible;
• Scott Franklin asked where the council was with regard to reconvening the airport committee meetings. Mayor Len Vohs said they just about have the airport manager’s contract ready to go out to bid, and once that’s done, they will go over the ordinances regarding committees. “The committees kind of morphed into rule-making bodies instead of advisory ones,” Vohs said. “There will be training for committee members to explain how the committee works and then they will begin meeting again;
• Councilors Dan Hoke and LaFollette both commented on how great the cemetery looked and thanked Bob Novak for his hard work. Hoke also noted that about 140 volunteers from Faith Baptist Church worked on 16 different projects around town on Sunday, May 22. “That’s about 420 volunteer hours from kids 4 years old to people in their 80s,” Hoke said.
The next council meeting is scheduled for 6 p.m. Wednesday, June 9, at city hall.