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Minutes from the special called Finance Committee on January 23, 2006.
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Finance & Administration Committee Minutes
Monday, January 23, 2006
3:45 p.m.
Special called meeting
Members Present were: Alec Farmer, Darrel Dover, John Street, Jim Hargis, Harold Perrin, and Ann Williams.
Leasing vs. purchasing equipment: Chairman Perrin discussed questions that had been presented regarding bank qualified leasing related to the TIF. It was explained that if the City has $10 million or more encumbered, then the City will not be eligible for bank qualified leasing. Bank qualified leasing has a lower rate than non-bank qualified leasing. Even though City assets were not encumbered with TIF, the TIF will still count against the City. Mayor Formon added that when the RFP went out to lease the equipment, financial institutions were asking if the City would be bank qualified, meaning would we have less than $10 million indebtedness within one calendar year. However it was explained that the TIF money, which totals over $7 million, is still outstanding and would count against the City’s $10 million. Discussion was held regarding where the $7 million TIF debt is coming from. Mayor Formon added the information he received was from the lawyer who helped develop the paperwork for the TIF for the developer and just came up fifteen minutes before the meeting. Mayor Formon indicated he has not had time to speak with City Attorney Phillip Crego. It was stated the Fire Department, Police Department and Street Department lease equipment totaled $4 million, but the City only has $2 million in bank qualified leasing. Mayor Formon stated the lowest rate was received from Bank of America and they would give the City the same rate whether the City is bank qualified or not. He added the rate was good for 30 days. A representative from Bank of America discussed the $10 million limit and what it means to financial institutions. He also stated he contacted his company’s legal counsel a...
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