Porterdale plans to take out a loan with United Bank and pay it back with 2011 SPLOST funding for the construction cost associated with the renovations of the Porterdale Gym.
The city approved a resolution authorizing the assignment of SPLOST revenues and the issuance and sale of a SPLOST anticipation note at a called meeting on Thursday.
The approved measure will allow the city to borrow up to $550,000 from United Bank in anticipation of receiving its 2011 SPLOST funds, which are only issued in increments of about $13,000 monthly.
The council voted 3 to 1 on the resolution, with council members Anita Rainey, Tim Savage and Lowell Chambers voting in favor of the resolution and councilwoman Linda Finger not in favor. Councilman Mike Harper was not present at the meeting.
The 74-year-old structure is being renovated using the four walls as a shell for a venue inside an enclosed courtyard which is to be used for different venues, such as weddings, receptions, picnics, reunions and concerts.
The total cost of the project is $950,000. City Manager Bob Thomson said the city will be using 2005 SPLOST funds — which is $395,000 set aside for the gym, at first to pay for the construction cost; then the city will use the funds from the $550,000 construction loan from United Bank.
"The bank will be paid from the proceeds from the 2011 SPLOST and we will renew it next year and pay them off. I think it’s a six year note. And the income is not from property taxes; it’s from the SPLOST revenue dedicated to the gym," Thomson said.
"It’s basically a construction bridge loan so that the gym can be done at once instead of having the construction stretched out over seven years," Thomson said. "The bank worked with us really well and so we have a $550,000 construction loan, which is a drawdown loan so that we are not paying interest on the whole principal, which is a good thing."
According to the resolution, the tax anticipation note will be calculated on the basis of a 360-day year and actual number of days elapsed and will have an interest rate of 4.25 percent per year. Interest on the note and all outstanding principal will be paid by United Bank on Dec. 31.
In other news related to the gym, Thomson said the demolition of the gym is about 80 percent complete. He also said council member Tim Savage has worked to place a camera up near the gym that will take pictures every five minutes capturing the demolition and construction process. City clerk Megan Reid said the city plans to place some of the pictures on their website.