The Lansing Town Aldermen finally freed themselves of a huge burden during Monday’s meeting by agreeing to pay a $64,000 loan in full.
The USDA loan was originally taken out by the town in 1998 to install a water and sewer system for Lansing. As of Monday’s meeting, the loan totaled $64,651.03.
Lansing had paid $5,000 towards the loan annually, but because of the interest on the loan, only $1,500 was going towards paying the loans principle.
The interest rate for the loan was a fixed rate of five percent. At the current rate, it would take 44 years to pay off the debt.
“It seems like alot to pay per month and very little is going to the principle, but at the same time, the interest rate isn’t that high,” said Jack Brown, a town alderman.
According to Dylan Lightfoot, the newest town alderman, paying off the loan now would save the town $33,000 in interest, more than half of the of the current loan’s total cost.
During Monday’s meeting, Bernice Prestwood, Lansing’s town manager, said the town had more than enough money in reserves to pay off the loan.
Prestwood said the town has saved money by “penny-pinching and being thrifty,” over the years. As well as a cash reserve, the town had about $49,000 in two IRAs.
“If it was my money and I had enough to pay off the loan, I would pay it off,” said Lightfoot. Brown agreed, saying “I think I would pay it off too.”
Lansing’s mayor George Rembert was still hesitant to pay off the loan in full. “It’s scary to shell out that much money without knowing what problems we could face moving forward,” said Rembert. He also said “we operate with a tight budget.”
“Of course, this decision is up to you,” said Rembert to the aldermen.
The aldermen expressed further hesitancy about paying the loan, and thought about all the possible problems the town could have in the future.
When the life expectancy of the sewer plant came into question, the aldermen were informed they cannot use town funds for that project. The sewer plant can only be paid for using the sewer/water fund, money that is granted to the town.
There was also discussion about the possible expenses that would be allocated for snow removal during this winter.
In a light-hearted moment, Rembert said “if we have an entire budgets worth of snow removal, we’ll have bigger problems to worry about.”
Alderman Mauvine Shepherd made a motion to pay off the loan in full, and Brown seconded. The motion was accepted by the aldermen by a unanimous vote of 4-0.