Published: October 21, 2008 08:54 am      

Council approves project financing

By TESA CULLI

tesa.culli@register-news.com

MT. VERNON — The city council approved financing for the dewaterization project at the sewer plant and for capital expenditures Monday.

The council had previously gone out for bids on the financing in an effort to get the best financing terms available, which resulted in taking two bids for the total cost of the dewaterization project. Monday, the board formally approved the bids and conditions.

The sewer plant improvement costs will be split between People’s National Bank, which will finance $434,500 for five years at 5 percent interest amortized over a 20-year period with a balloon payment on the fifth anniversary date; and the other half will be financed from the Jefferson, Marion, Washington Community Development Corporation for a term of five years at 3.75 percent interest annually, amortized over a 20-year period with a balloon payment on the fifth anniversary date.

The loan for the capital expenditures, which will be used to purchase equipment for use by general government, parks, public works, police and the public utilities departments, is for $275,000 from People’s National Bank for four years at 3.8 percent interest. Collateral for the note will be two fire pumpers and a street sweeper.

Monday night, the council also approved the audit, which was presented in workshop session to the council last week. According to Krehbiel and Associates CPA and partner Jim Leuty, the audit for fiscal year ending April 30, 2008, validated the council’s actions in making a loan to the public utilities fund and raising water and sewer rates in May.

“The public utilities fund experienced a substantial loss to the tune of $1.3 million, with $830,000 of depreciation, which was a non-cash expense,” Leuty said. “This audit justified the actions of the city council.”

Leuty went on to report the net cash for the utilities fund in the audit showed a deficit of $589,368, which was “unusually high.” Leuty said the amount of deficit in the utilities fund for the prior year was $147,000.

“This says the operations were not providing any cash to the system,” Leuty said. “They were actually drawing cash from the system.”

One area of concern for next year will be the pension funds, which Leuty said the city really has no control over. The Police Pension Fund and the Fireman’s Pension Fund and tax levies for retirement are controlled by boards outside the control of the council, including the state insurance board, which sets the levies for the funds.

“Obviously, I know the city doesn’t have direct contact with these,” Leuty said. “You should encourage them to maximize their investments because the levies may be up significantly this year. They need to maximize their performance as much as possible.”

In other business the council:

Approved a bid of $10,820 for incandescent Christmas pole decorations;

Approved a request to bypass the formal bidding process to expend 2007 JAG grant funds to purchase electronic surveillance equipment for the Mt. Vernon Police Department narcotics division;

Approved rezoning property at 1713 S. 13th Street from R2 to RM2 for owner James May; and

Held a first reading on an ordinance to vacate an alley behind the District 80 Central Office and Lincoln School. A second reading was necessary because a 4/5 vote is necessary to vacate an alley, and council members Shirilyn Holt and Mike Walker were absent from the meeting.

Mayor Mary Jane Chesley and council members David Wood and Mary Burgan extended their congratulations to the Experimental Aircraft Association and the Southern Illinois Harvest Festival Committee for their activities over the weekend.

The council was also introduced to Janalynn McCrary, who has been selected as an official state finalist in the Miss Illinois USA Pageant, which will be held in Chicago during December.