MART (February 1, 2016) The U.S. Department of Agriculture awarded Mart a $5 million grant and $17 million in low interest loans in August 2015 to pay for much-needed infrastructure upgrades, but so far the city hasn’t been able to access the funds to start work on repaving streets and updating the community’s aging water system.
The snag is the remaining $450,000 in debt the city still has from a 1998 bond issue.
Over the past five months Mayor Pro Tem Henry Witt has been working with the Attorney General's Office and the USDA to see if they could all agree on the terms.
A regulation prevents cities from over-extending themselves, which means that Mart could not afford to pay off both the old and new debt without increasing taxes, which officials don’t want to do.
So, the city is considering an interim loan during the life of which it would pay only interest, and which it would pay off with the low-interest loan from the USDA.
Monday night, during a called meeting, the city council will vote on a resolution to authorize publication of notice of intention to issue certificates of obligation in the amount of $17 million.
"By law... $17-million would have to be paid off by our revenues and taxes which isn't possible but the USDA agreed to come in and pay off that interim loan to help us out so we could so we wouldn't have to take on the new debt at the same time we were taking on the old debt,” Witt said.
To get the attorney general's approval, the city has discovered a work-around.
Witt says old bond debt will be rolled into its interim loan of $17 million.
After the project is finished, he says the USDA will take it's long term low interest loan money and pay the city's interim loan.
Back in January, Witt says the AG gave oral approval to the plan, but officials are expecting formal approval within the next 60 days.
If all goes well, Witt says construction can begin during the first part of 2017.