Newton seeks $5.67M in loans

Newton will borrow up to $5.67 million to finance new equipment, real property improvements and infrastructure repairs.

Among those infrastructure repairs will be nine projects to rehabilitate Newton water lines and three projects to address problem sewer lines. Those rehabilitation projects along with equipment and property improvements were approved by Newton City Council in May as part of a $32.4 million Capital Improvement Plan (CIP).

"We are getting ready to put in place a capital improvement program that is so important to our city," said Robert Mullinax during his last night of service as Newton mayor. "This is a big step forward for the city of Newton."

Funding for the capital purchases and infrastructure repairs will come through two loans — a seven-year $1.875 million loan from BB&T with a 1.91 percent annual interest rate; and a 15-year $3.79 million loan from BB&T with a 3.11 percent annual interest rate.

Newton City Council approved the financing proposals during its Tuesday night. While the borrowing could be up to $5.67 million, Newton Finance Director Serina Hinson said the total funds required for financing projects in this year's CIP should be less.

"We asked for financing not to exceed $5.67 million ... but our costs came in substantially lower," Hinson said, adding the city initially budgeted $7 million for this year's projects and equipment in the CIP. "Our costs (bids) came in substantially lower ... We will actually be less than the $5.6 million and we will actually borrow closer to $4.8 million."

A determination on which equipment and purchases would be included under the seven-year loan or the 15-year loan was based on the life of the asset, Hinson said.

"We don't want to have a lien on a piece of equipment that needs to be disposed of and we can't," she said.

Some savings in forecast expenses compared to original CIP estimates came as the city was able to piggy-back equipment purchases with other cities making similar acquisitions. Other equipment was purchased from the state contact system — the purchase for which does not require board approval for purchase bid acceptance, Hinson said.

After approving plans to borrow funding, Newton City Council also approved purchase bids made on equipment and construction bids infrastructure projects.

"Everything we are talking about bids for, this council has already approved," Mullinax told city council. "We are not going to debate the necessity of these items. You already voted on it."

Items approved for purchase under the seven-year loan included:

Streets department:
Backhoe/loader: $104,470.
Seven-yard dump truck hook system: $132,131

Chipper truck: $73,202.
New hook loader with recycle containers: $115,721.
International recycle truck: $165,662

Records management system: $359,653

Startown station renovations: $79,500

Backhoe: $98,136
Seven-yard dump truck: $143,215
High pressure vacuum truck: $293.493

Water filtration plant:
4.5 million-gallons-per-day (MGD) lake pump: $27,499

Wastewater treatment plant:
Metal storage building: $55,950

Bucket truck: $94,143

Items approved for purchase under the 15-year loan includes:

Water and wastewater rehabilitation projects: $1,672,865
Shannonbrook; U.S. 70 W; North College Avenue; Ervin Avenue from B Street to Caldwell Avenue; Davis Street from B Street to Caldwell Avenue; East E Street from Ervin to Saunders; Boundary Street; South Brady Avenue from Fourth Street to D Street; South Brady Avenue from N Street to K Street. Sewer rehabilitation: Snow Creek outfall line; South Cline to South Main Avenue and North Frye Avenue from 13th Street to 15th Street.

Water filtration plant:
8 MGD pump: $600,000

Wastewater treatment plant:
Thickener refurbishment: $48,000

Electric line extension: $128,775
Reconductor electric line: $220,800
Generator modifications: $387,500