Flume debt on way to being paid
The Shelbyville City Council may pay off $2 million in flume debt by the end of June.
The city council discussed flume debt during a study session Tuesday. The council would ask Shelbyville Power, Water & Sewer System for the funds, according to the discussion.
The total flume cost is just over $4.5 million, said City Manager Jay Johnson. The utility had agreed to pay half the repair cost, up to a certain amount, based on discussions on whether a failed sewer line played any role in the flume collapse, Johnson said after the meeting.
The $2 million note is the largest of three outlays the city borrowed, he said; the others are $500,000 and $1 million. The $2 million note has the highest interest rate at 2.81 percent as well.
The city borrowed the money from the Tennessee Municipal Bond Fund. The city would like to pay the note prior to the end of the fiscal year, Johnson said in an email to Linda Mooningham, the bond fund's marketing director and legal coordinator.
Johnson said at the study session that he thinks the city can get the bond fund to waive a pre-pay penalty. Paying the note by the end of the fiscal year would take that debt off the city's books.
"I shared with David Crowell (director of Shelbyville Power, Water & Sewer) that's something that would be of value to the city," Johnson said.
Johnson added that the city needs to make sure residents understand that while property taxes were increased as a result of flume expenses, the city still used $1.33 million from reserves to pay for part of the repairs.
"It was a good project, it was spent properly," Johnson said. "We have taken our reserves; our capital fund is gone. We took a lot of operating expenses out of the budget. It's haunting us, if I can use that term, on next year's budget. We've had so many needs deferred."