Town Pays Off A Third of Its Debt

The town parking garage has incurred a lot of scorn over the years — with some, including those on the current town council, viewing it as a symbol of big spending by local government with questionable need. But the nearly $5 million loan used to pay for the garage has been approved for payoff by council Tuesday. The payoff will reduce the town's debt by 30 percent.

The remaining $3.5 million will be paid off using hospitality and accomodations tax money, saving the town more than $700,000 in interest, according to town Finance Director Belinda Harper. 

Councilman Bob Jackson called the decision a "no brainer." The council members agreed.

"This council is going to take a hit for the Berry house ... but by paying off this loan we're going to save an amount that will far exceed what we appear to lose on the Berry house," Councilman Bill McIntosh said. The Berry house has also been an unpopular purchase by the town, and the council recently decided to sell that property at a loss. 

As of 2011, the town had about $11.5 million in debt. After this loan is paid off, less than $8 million is owed on the general obligation bond which paid for the municipal complex and less than $150,000 is owed in pothole patching.

"We're in really great shape," Harper said. 

The loan was taken out in November 2006, $4,925,000 at a 4.12 percent interest rate on a 15-year payment plan. 

After paying off this debt, the hospitality tax fund will have a little more than $200,000. As the fund recovers, the town plans to use the fund to pay for the Butternut fire station in 2013.