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In a move to solidify the final piece of funding for the upcoming Phase One home buyouts, the Valley City City Commission approved accepting a loan of $1 million from the Public Works electrical department at a special meeting Tuesday.
â€śWe felt that it was time to make a vote on this,â€ť said City Commissioner Matt Pedersen. â€śThe buyout candidates are ready to go.â€ť
â€śI donâ€™t think weâ€™ve got a choice of where we get the money,â€ť said Mayor Bob Werkhoven, â€śand the City Attorney has indicated that we are within the law as far as (the loan), so now we can feel our conscience is clear.â€ť
The inter-agency loan is allowed for under a provision in the North Dakota Century code, the Surplus in Municipal Utilities Fund, section 40-33-12.
â€śEssentially that section of law states that if there is a surplus in the utilities fund, the municipal body can invest it,â€ť City Attorney Russell J. Myhre said. â€śThis would be a warrant, a bond or essentially a loan. Weâ€™re going to draft it up so it will constitute a loan paid back to the municipal utility fund.â€ť
The public works department currently has a roughly $7 million surplus over and above its operating expenses, and Century Code allows for the transfer of up to 20 percent of those funds to other departments within the city.
â€śThe million dollars represents about 14 percent of the total surplus, so itâ€™s within the provisions of the statute,â€ť Myhre said, adding that he is going to recommend the city pay some sort of interest rate on the loan.
â€śI donâ€™t want this to just be a facade transaction, I want it to be that weâ€™re following the statute properly,â€ť he said.
The loan was the cityâ€™s first choice in lieu of taking money from an alternative city fund or raising taxes.