City pursues low-interest loan

The Kalispell City Council will be asked Tuesday to authorize up to $375,000 in borrowing from the Montana Board of Investments. The money would be used to finance several equipment purchases and help cash flows in at least two city departments.

That includes a mower, a used truck and a stump grinder for the parks department and two used tandem axle dump trucks for the streets department.

The expenditures were included in the 2012-13 budget and were anticipated to be funded through the Montana Board of Investments because of record low interest rates.

A resolution to authorize the borrowing goes before the City Council on Tuesday.

“This just approves the loan terms through the governing body,” City Manager Doug Russell said.

The five-year loan has a 1.25 percent interest rate to start. That rate can change as market conditions change, but the loan can be paid off at any time.

Interest obligations start only when the city draws upon the loan and only to the extent that draws are made.

Kalispell has purchased equipment worth $65,000 for the parks department and intends to make a draw on the loan for that amount. That way payments for the equipment can be spread over five years to help the parks department with its cash flow.

Public works also anticipates making budgeted equipment purchases this fiscal year to take advantage of the low interest rates.

That includes the $174,296 purchase of two used 2006 International 7400 dump trucks that  also will be presented for council approval on Tuesday.

A $45,000 leaf machine purchase planned for this year may be put off because the dump truck bids came in above the $150,000 budgeted for them.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.