LOUISBURG — The city of Louisburg will apply for a low-interest loan through a bill Gov. Laura Kelly signed March 3 that is designed to assist city utilities facing high electric and natural gas bills caused by a bitter cold snap in mid-February.
Senate Bill 88 establishes a $100 million low-interest loan program for municipal utilities facing high utility bills. The bipartisan measure passed in the House (124-0) and in the Senate (37-1) on March 3 and was signed by the governor that evening.
At a special meeting Wednesday, March 10, Louisburg City Council members and City Administrator Nathan Law focused most of their discussion on the length of the loan — 7 years vs. 10 years.
Ultimately, the City Council chose to seek a 10-year loan at an interest rate that likely would be one-quarter of one percent.
The city of Louisburg is facing a $3.639 million cost for its natural gas utility for the cold spell in February that saw natural gas and electric prices soar for municipally owned utilities across the state.
Law recommended paying $1 million of the bill with city reserve funds, knocking down the loan amount to about $2.6 million.
“We need to be as overly cautious as we can on the funding side because if this bill comes due in two or three weeks, like I’m expecting, at the full $3.639 million, we need to know we have some mechanism to pay for it at that time or shortly thereafter,” Law said.
Under one possible scenario which Law provided, a seven-year loan would add $21.67 on the monthly base price of $18 to be hooked up to the service. At 10 years, the figure would drop to $15.22 on top of the $18 base.
Those prices were simply examples. Any adjustment in the cost of the city’s natural gas service has yet to be determined.
Council member Donna Cook said spreading the cost of the loan over 10 years would benefit the city’s natural gas customers more than a seven-year loan.
“Even though we sign up for a 10-year, we could pay it off quicker,” Cook said. “I’m just thinking of our senior citizens.”
There is no penalty for paying off the state loan early.
Mayor Marty Southard also favored the 10-year option.
“I don’t think we have a lot of choices, the idea is the length,” Southard said. “I agree with Donna, we have to be very cautious of someone living on a fixed income.”
At a special meeting Friday, March 12, the City Council voted to adopt an ordinance authorizing the city to apply for a 10-year, low-interest state loan totaling $2,639,994, with payments to be made biannually.