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Weaver City Council decides to pay off $500,000 bond issue
(The Anniston Star Via Acquire Media NewsEdge) Mar. 16--The City of Weaver has initiated the process of paying off a 1996 bond issue that was the subject of some disagreement in recent weeks.
After a unanimous City Council vote last week, the city gave the OK to its bond company to pay off the half-million-dollar remnant of the $1.1 million bond issue.
Weaver officials were waiting to hear from the state attorney general's office on whether the city was legally required to pay back the bond, which some officials said should have been spent within three years.
Weaver Mayor Garry Bearden said the city still doesn't have an AG's opinion in writing, but the city attorney was told verbally that the bond should have been closed out.
The city's move to seek the opinion stemmed from a disagreement over whether the city should use about $440,000 left over from the original loan, currently in a bank trust, and about $60,000 out of pocket to pay it off.
Bearden's position was that the city would save money by paying off the loan, instead of accumulating further interest on the money and making monthly payments.
One of the initial opponents of the measure, former Councilman Wayne Willis, argued that the bond was taken out in 1996 to pay for road improvements on Jacksonville Street that are still in the process of being completed. By using the $440,000 that remains of the bond, more money would have to be taken on loan to finish the street project, he said.
Willis recently resigned from his post because of scheduling conflicts with his job as an Anniston police investigator.
According to Bearden, the Oil Trust Fund, one of the city's savings accounts, will be used to pay off the balance of the loan.
When the discussion began several months ago, the total payoff amount was estimated at about $507,000. The amount is lower now due to payments the city has made, Bearden said.
With the $440,000 sitting unspent in a bank trust, that would leave the city to pay something in the neighborhood of $60,000.
Bearden said he didn't know who termed the account the Oil Trust Fund originally.
"It may have had a purpose at that time, I don't know," he said.
The fund is not earmarked for any recurring projects or services in the city. A previous council, however, elected to build some playground equipment using some of the money in that account, he said. Bearden said the equipment hasn't been built but is on the council's agenda for the future.
Paying off the loan will provide savings of around $120,000 in future interest, he said.
Additionally, the city will once again be able to use money collected from the gas tax that was used as security for the loan, though it was meant for road projects.
Bearden said the whole process of paying the loan off could take up to 60 days.
About Nick Cenegy
Nick Cenegy covers the military, Jacksonville and northern Calhoun County for The Star.
To see more of The Anniston Star or to subscribe to the newspaper, go to http://www.annistonstar.com/.
Copyright (c) 2009, The Anniston Star, Ala.
Distributed by McClatchy-Tribune Information Services.
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