PORTAGE | The City Council on Tuesday night approved a $1.45 million bond to purchase equipment.
Portage Clerk-Treasurer Chris Stidham said the money will be borrowed from Porter County and come from the interest on the proceeds of the sale of Porter hospital.
"This is significant because we will be the first municipality to borrow from the hospital sale interest proceeds. We will start putting that Porter County money to work in Porter County," Stidham said.
Stidham said city officials are negotiating an interest rate of not more than 2 percent with Porter County Treasurer Mike Bucko.
The idea began when the city wanted to purchase three new automated trash trucks for $715,000. Not having the cash, officials knew they would have to borrow, Stidham said. Interest rates with a private lender were 2.8 percent.
Officials decided to bundle additional equipment needs into the loan. A crack sealer and related equipment and two pickup trucks for the street department will be purchased, along with eight police cars and two SUVs for the Police Department, an ambulance and three defibrillators for the Fire Department and a dump truck and pickup truck for the Park Department.
The loan will be repaid over five years from Cumulative Capital Development fund proceeds.
In related business, the council approved resetting the rate for the CCD fund. Because the rate, originally set at 5 percent, declines over the years as assessed valuation increases, revenue into the fund declines. Stidham said officials expect about $130,000 less this year in the fund.
The council approved upping the rate to 4 percent, the maximum allowed in a county with an income tax. That will generate some $400,000 to $450,000 annually beginning with the 2014 property tax bill.
Stidham said the increase will have no affect on homeowners who have reached the property tax cap. Other homeowners will see an increase of $8 to $9 annually on their property tax bills.