Careful consideration a must
Published 12:24 am Friday, August 28, 2009
During Thursday night’s work session concerning the proposed bond issue, Selma Council member Dr. Monica Newton raised a good question. She said she thought bond issues were for infrastructure and building.
Since the first bond issue proposed list came out, Newton has raised questions about why the city would float a bond to pay in part for equipment, which would not last the life of the bond repayment.
She has a good point.
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On the bond list are backhoes, trucks, zero turn mowers and garbage trucks. None of these items are cheap. The city needs to replace the items apparently because of a lack of a system to replace and manage the older equipment.
Also on the bond list are a set of street resurfacing and sewer projects, building rehabilitations and repairs. These items make more sense because they are traditional bond issue items.
Many share Newton’s concern about the equipment.
Council member the Rev. Dr. Cecil Williamson also has raised an issue about the wisdom of purchasing a $188,000 garbage truck as the city begins to consider outsourcing garbage disposal.
These are two strong voices on the city council raising valid questions. Similar questions have come from people in audiences all over the city during the last month of these town meetings.
Mayor George Evans has worked with representatives from Sterne Agee, who say the city could pay off the equipment during the first five years of the bond issue, leaving the remainder for long-term projects.
City officials have yet to publicly discuss municipal lease in which purchase obligations are a form of short-term financing to purchase essential equipment. The leases represent a municipality’s promise to pay under installment purchase contract when a municipality needs to purchase equipment and doesn’t want to issue bonds, buy the equipment for cash or rent it.
The municipal lease is only one example of a way to move equipment from the bond issue list to another way of financing, but city officials will have to consider alternatives carefully and make the proper move that’s best for the city and its residents.