Vote split 3-2
Polk County commissioners decided on Monday, March 5 to pay off the senior center loan early to save approximately $316,000.
The board was split on whether to pay off the loan early, with commissioners Ted Owens and Tom Pack voting against paying off the loan.
Commissioner Ray Gasperson, Renée McDermott and Cindy Walker approved the payoff.
Polk County’s original loan in 2008 was for $1,700,000 to purchase the senior center property off Skyuka Road in Columbus.
Polk will take $1,376,043 out of its fund balance to pay off the loan, which would have extended until 2024. The payoff includes a $13,600 prepayment penalty.
Polk’s debt service on the loan for fiscal year 2013 was budgeted at $165,402.
Owens and Pack said they would rather not pay off a low-interest loan, saying the county should instead use fund balance money to run water lines.
Gasperson, McDermott and Walker argued that the loan’s interest is not that low and the county is making little interest on money in the bank
“It is hard to not say it is good to pay off debt. However, there are times, especially when you have a very low interest loan and if you have to pay up front over $13,000 to pay the loan off, it makes sense not to,” Owens said.
McDermott said it makes sense to pay off the debt considering the county is getting 1/10 of one percent interest on money sitting in the bank and the county is paying 3.91 percent interest on the loan. She said the county will save $316,307, which is taxes residents won’t have to pay.
“I’d like to see us save the taxpayers one-third of a million dollars,” said McDermott.
Pack said the county won’t be saving taxpayers a dime, considering the money saved will be spent elsewhere.
“Why don’t we give them a tax break?” Pack said. “Let’s quit playing with words. You’re not going to save them (taxpayers) anything.”
Walker said commissioners began discussing paying off the loan next fall because the county is not making any money on investments right now. She said she was the one who suggested paying it off earlier if the county was going to pay it off anyway.
“The idea was why don’t we pay off debt since we can’t make any money?” Walker said.
Gasperson said the reason the county was able to fund an additional $400,000 to schools this year was because the county had paid off other debt and saved in debt service. Gasperson said paying off this debt will make other expenses more sustainable, such as giving employee pay increases next year.
Citizen comments on the payoff included comments from Rick McIntosh and Doris Holbert, both of whom disagreed with paying off the loan.
McIntosh said it is not a good time to pay off the loan and he thinks the county should use those funds for other projects at times when interest rates are going to be higher.
Holbert said she thinks the county should use the $1 million to build a water line rather than pay off a low interest loan.