Council unanimously passed first reading Monday night of the $2.8 million general fund budget, an increase of 6 percent over the current year’s budget.
Council member Connie Bowers said the proposed budget was balanced and realistic.
Bowers also noted that the budget reflected a 48 percent reduction in local government funding.
Council also passed first reading of the utility system revenues budget of $2,611,000, an increase of $227,000, and they agreed to spend $10,000 on fireworks for the Fourth of July.
Prior to budget votes, a bond attorney advised council of the steps to be taken toward funding the new water plant through Rural Development.
Brad Love of Haynesworth, Sinclaire and Boyd said that once approved, Rural Development would send a packet outlining conditions for financing.
A meeting will be held between Rural Development and the city before a contractor is selected, and when construction is 90 percent complete a bond anticipation note will be issued, he said.
The revenue-based bond will be repaid over a 40 year period, paid through water and sewer revenues, according to Love.
He said the loan would not affect the city’s ability to borrow against operations funds.
“It only affects what can be borrowed based on that revenue stream,” he said.
He said regulations outlined by Rural Development for the project will be “government intense,” and the process could take between a few months and a year.
Interim administrator Herb Thompson said he hopes the city can get a grant to reduce the indebtedness.
“We could get less number of years, but the payments would b higher, and we would need a higher revenue stream,” he said.
Mayor David Owens also noted that paying the loan back over a 40-year time period would also free up funds for other things like water lines.
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