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County considers loan options for new terminal

ALPENA — The Alpena County Board of Commissioners is looking for a way to reduce the monthly payment and interest from a $2.7 million United States Department of Agriculture loan it intends to apply for to cover its match for the new terminal at the airport.

One of the considerations is to use a portion of the money in the revolving tax fund for the project and to borrow less from USDA. The loan, which would be for 30 years, also could be for less once bids for the project come in under what is anticipated.

Airport consultant RS&H set the $2.7 million amount conservatively by adding an additional 30 percent to what it estimates the cost should be. The county could then borrow less from the USDA if bids are lower.

During Wednesday’s finance committee meeting the loan was discussed as well as a possible plan to lower the payments. Commissioner Brenda Fournier asked Treasurer Kim Ludlow leading up to the meeting if it was possible to take $1 million from tax revolving fund to use toward the project, which would lower the amount of money needed from the USDA as well as the payment.

Ludlow said after looking at the fund, which has more than $6 million in it, she believes it can absorb the expenditure and still have enough liquidity for its primary intent.

“I was asked if they could used those funds. I looked and in my opinion we could do it,” Ludlow said. “That could lower the payment over the term of the loan and reduce the amount of interest on it.”

Fournier said she is not in favor of borrowing $2 million or more and brought the idea about the fund to Ludlow. She said keeping the payments as low as possible and cutting down the amount paid in interest is being fiscally responsible.

“I think taking money out of the fund and borrowing the balance is a more reasonable idea to me,” Fournier said. “The money is there and I think we should take half from the fund and borrow the other half.”

Commissioner John Kozlowski had the same concerns as Fournier and believes limiting the amount of interest and bringing the payment amount down will benefit finances moving forward.

“That payment is going to be huge and the amount we end up paying in interest will be almost as much as the loan itself and I have serious concerns about that,” Kozlowski said. “If we can bring those down I would feel a lot better.”

If the county decides to pull money from the revolving tax fund, it would need to pass by a two-thirds vote of the full board of commissioners.

Steve Schulwitz can be reached via email at sschulwitz@thealpenanews.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews.

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