Bloomsdale Officials Agree on Funding Mechanism For Water Project
By MARK EVANS
City attorney Mark Bishop and Bloomsdale Bank representative Justin Dotson discussed funding mechanisms for Bloomsdale’s massive water project with city officials May 10
The project, which includes adding a 300,000-gallon water tower, demolishing the current standpipe and redoing a large amount of aging waterlines, could reach as high as $2.2 million.
The board of aldermen took their advice and voted to go into a 10-year lease-purchase agreement with Bloomsdale Bank for $2,243,000.
City officials believe the deal will give them a little breathing room.
The lease-purchase agreement is like a home equity loan in one sense, because the city is receiving money from a bank to finance a project using assets of the city to secure the financing but it is structured in such a way as to not actually increase the total debt of the city. Unlike a straight financial loan, this type of agreement does not have to be put on a ballot for a vote of the people.
Mayor Paul Monia tossed out a “worst-case scenario,” as far as borrowing money goes. Even isn a scenario in which no city money is used for the project and the $2 million or so is financed, he said the payments would be less than $20,000 a month, while the city is bringing in about $40,000 on average.
“Do I want to carry it out 10 years? No; that’s not the idea,” he said. “But I also don’t want to financially strap the city, either. I’d like a little bit of breathing room, too.”
The point he was making was that even without paying the agreement off early, the city could easily handle the payments.
City Clerk Lynnette Randoll said that since 2018, when voters passed a half-cent sales tax for capital improvements and another half-cent transportation tax, $331,381 has come into the capital improvements fund, while a similar figure came in from the transportation tax and some $660,000 to the general fund.
Ward 1 Alderman Chris “Sappy” Basler noted that they were “trying to build a safety net or cushion.”
Monia stressed that the city needs to focus on the first two phases of the project, which are bigger and more expensive than the later ones.
“There’s as many as five phases for this project before it’s over,” he said. “I need to stop thinking about the rest of it and focus on 1 and 2, is really what I need to do. Let’s focus on 1 and 2. The only thing we’ve paid for on Phase 3 is engineering.”
He noted that the later phases, while less expensive, will require easements be obtained and other possible complications.
The site where the tower will go up has been prepared and the tower should go up by November.
“Believe me getting the tower and this first phase done is huge,” Monia said. “We can move through 3, 4 and 5 because we don’t have a million dollar tower we’re looking at. We already have that. We definitely bit off the big part first.”
Before the vote was taken, Bishop indicated he would like to see firmer numbers that could be considered by the bank and drafted into the lease, so he and the bank could get the top line item the city plans to borrow – especially since the bulk of the project has already gone out for bid.
“You have to understand, this is big time for us,” Basler said. “We don’t spend this kind of stuff normally. We‘re very reserved. We’re trying to make sure we make the right decision.”
“I‘ve sat here in 27 years and have never spent this in 27 years,” Monia added
“I know you guys have dealt with a lot larger sums,” Basler said, “but a misstep and we could really take about 10 steps backwards. I think we want to be cautious on how we would do it. We would feel a lot