At Tuesday night’s work session for the Demorest City Council, financial concerns permeated the agenda. The meeting started out with resident Grady Tench speaking during the Citizen Concerns portion of the meeting. “I came to talk about the proposed pension. I don’t agree with it. I don’t think you should do it.” Tench was talking about the proposal currently under study that would give retirement funds to elected officials.
Brian Horton of South State Bank made a presentation to the Council on a proposal for refinancing several of the City’s bonds. In particular, there are three bonds, one from 1993 and two from 1996 totalling approximately just over $4 million dollars financed at over 5%. Horton’s proposal from South State would refinance those bonds for 15 years at 2.81%. The estimated savings to the City would be over $20,000 per year. Two benefits to the bank’s proposal are that there would be no need to wait for the release of the 2014 audit and the ability to release the reserve requirement. Currently the City holds approximately $332,000 in reserve as part of the bond financing requirements. Jolie Mixon, current acting City Treasurer, suggested possibly using the reserve to pay off the 1970’s bonds or reducing the principal on another note, “freeing up the reserve is a big benefit,” said Mixon.
The City currently has 6 bonds dating from 1975 to 2014. There are also 5 outstanding loads with GEFA that could also benefit from the release of the reserve. Horton noted that the bank could close on the refinancing in around 30 days, if the City could gather all the necessary requirements. A vote on the proposal is expected at Tuesday August 4th’s regular meeting.
Mixon reported to the Council that she and new City Manager, Steve Lindsey, have already started discussing the budget process. “I want the budget to be more meaningful and give you more information,” noted Mixon.” Mayor Rick Austin praised Mixon for her work and the Council echoed their appreciation.
Demorest’s budget continues to be tight but, with the approval last month of the rate increase for water, the budget squeeze is expected to ease. Department heads have been holding off and keeping a tight rein on spending.
Tuesday, August 4th is the regular Council meeting. It begins at 7pm in the City Council chambers located on the bottom floor of the Demorest Fire Department/Municipal Building on Ivy Street.
