Redkey extends bond life (04/21/06)

REDKEY — A series of measures designed to help get the community through its current financial crisis were approved at Thursday night’s town council meeting here.

Redkey town attorney John Brooke introduced Sue Beesley, a bond attorney with the Bingham McHale bond counsel firm of Indianapolis, who explained the firm’s proposal and timetable to town council members.

Council members then started the process of refinancing current sewer revenue bonds to lower outstanding payments from the $80,000 range to a more manageable figure.

Rather than paying off the remaining $240,000 in principal on the sewer bonds over the next two years, the town will be spreading those payments over a 10-year period under the new plan which was approved Thursday night. This will lower the individual payments but increase the overall interest charges and other expenses, as new bonds will have to be issued.

Local banks will be asked to purchase the new bonds, and Beesley said she has already spoken to representatives at MainSource Bank in Redkey.

“This is just the first step,” Brooke said, noting that eventually the town may have to issue more bonds to cover future improvements to its water and sewer utility system which is in need of major repairs and renovations. These additional bonds could eventually be blended into the proposal approved Thursday night, Brooke said.

“I for one, appreciate all your hard work,” council president Dottie Quakenbush told Brooke, clerk-treasurer Sandy Kirby and Beesley.

“I know it’s not what you’d want to do, but you don’t want to default on the (current) bonds, either,” Beesley said. She added that legal and accounting fees as well as other costs relating to the refinancing project could total as much as $45,000.

With the new bond refinancing plan set in motion, town officials then turned their attention to pooling available resources to be able to make the next $82,200 payment on the current bonds in time to meet an April 28 deadline.

Kirby and Brooke had prepared a resolution transferring town funds from eight different accounts into the sewer utility sinking fund in order to make the necessary bond payment on time. The largest amounts will come from the motor vehicle highway fund, $22,500; local road and street fund, $7,300; railroad fund, $31,800; combined sewer separation fund, $6,800; and economic development income tax (EDIT) fund, $3,000. All eight funds will later have to be repaid from the proceeds from the bond redemption and refinancing project, the resolution states.

Also stated in the resolution is that the town “has insufficient funds in its current sewage utility sinking fund as a result of the intentional acts and omissions of the former clerk-treasurer.” Brenda Adkins, who previously served as Redkey clerk-treasurer for the last 20 years, resigned from that post last year as the State Board of Accounts was conducting an audit of the town’s financial statements and bookkeeping procedures.

The transfer of funds resolution was approved unanimously by the three town council members present at the meeting: Quakenbush, Dixie Toy and Violet Erlenbush.

Brooke said he realized this would “strap” the town for funds in the next few weeks, but in the long run it would save thousands of dollars in interest payments, if an alternative plan of seeking a short-term loan had been followed.

Redkey officials expect to close the sewer bond refinancing project by June 1 and then repay the various other funds. Meanwhile the town council only intends to purchase items which are considered necessities.

One such item was approved at Thursday night’s meeting. Council members unanimously agreed to a one-year extension of the town’s and Redkey Volunteer Fire Department’s property liability insurance policy with the Barnum-Brown Insurance agency of Dunkirk. Bob Brown said the premium rate would remain basically the same as last year — $30,571 last year and $30,523 for the new policy year.

Also Brown said that in light of the town’s current financial problems, his firm was willing to accept a payment of only $94.11 to extend the coverage until the town received its next tax draw or income from the bond refinancing project.

“That’s excellent. That works very good for us,” Brooke said. Brown added that the old policy was set to expire at midnight on Thursday.

Also at Thursday’s meeting, council members:

•Learned that donations are still needed to make this year’s Redkey Volunteer Fire Department Fourth of July fireworks display a reality. A special fund for this purpose has been set up at the MainSource Bank branch in Redkey, Fire Chief Randy Young said.

•Heard a report about continuing activities to erect a monument near the town hall to honor the memory of Redkey High School. This will include a brick structure, possibly with a copper roof, housing the original school bell, Redkey resident James Barrett explained. He added that donations to this project could be made to the Redkey High School Alumni Association in care of Sandy Kirby who is the treasurer for the alumni association in addition to being Redkey clerk-treasurer. Kirby said that so far the response from the alumni association members has been very good. Council members also voted unanimously to proceed with this project.

•Approved an agreement with Redkey police officer Mike Daniels to have him mow all the town property, using town equipment and gasoline, during his off-duty hours at a contract price of $1,300 for the whole growing season. This will include the Redkey park areas and ground around the town hall.[[In-content Ad]]