The city of Truesdale will borrow $330,000 to cover its portion of the cost for a community center and storm shelter now under construction at Bruer Park.
That money includes what Truesdale owes …
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The city of Truesdale will borrow $330,000 to cover its portion of the cost for a community center and storm shelter now under construction at Bruer Park.
That money includes what Truesdale owes to match a 90-percent cost-share grant from the Federal Emergency Management Agency (FEMA), plus about $144,000 more for features to make the building a functional community center, rather than just an empty storm shelter.
FEMA is contributing about $1.6 million to the project, but won’t pay for “unnecessary” features such as a kitchen or air conditioning.
To cover its portion of the cost, Truesdale will enter into a lease-purchase agreement with First State Community Bank. The Truesdale Board of Aldermen unanimously approved the $330,000 agreement Jan. 13.
Under the agreement, the bank will provide the funding Truesdale needs, and will have a claim on the community center building until those funds are repaid. Truesdale will make twice-yearly “rental” payments of $13,105 for up to 15 years, or until it has repaid the $330,000. The city will also be charged an annual 2.3-percent interest rate.
Once the city repays what it owes, it will no longer have an obligation to the bank. Failure to pay would mean the building belongs to the bank.
City Administrator MaryLou Rainwater said the city can be done with the payments sooner and save on interest by making larger-than-required payments.
“Anything above the normal payment can be applied to the principal. There’s no penalty for early payoff,” Rainwater said.
The city had hoped to receive additional grant funding from the state to avoid borrowing money. However, that funding did not materialize, Rainwater said.
