Commonwealth Journal

July 26, 2013

Ordinance will allow loan for fire trucks to be refinanced

No additional taxes will be levied — unless county fails to pay debt

by Jeff Neal
Commonwealth Journal

Somerset —

Pulaski Fiscal Court this week passed the first reading of an ordinance that would refinance the county’s loan it took out in 2011 for new fire trucks.
The General Obligation Lease Ordinance would refinance the $2.5 million loan at a lower interest rate.
“In layman’s terms, we’re just refinancing a loan because we’re able to save a substantial amount of money, and we’re not adding any time to the loan,” said Pulaski County Treasurer Joan Isaacs. “Any time we can save money, that’s good for the taxpayers.”
The debt is repaid through the county’s fire fund. That money is generated by the established insurance premium fund tax. There will be no new tax associated with this ordinance, according to Isaacs.
“The legal wording is a little confusing — they call it a lease, but it’s basically just a loan,” Isaacs said. “And the tax is already there....there will not be a new tax.”
The wording of the ordinance does provide for a “direct annual tax on all taxable property within the county” that would be levied “only to the extent that the project revenues, or other revenues received from taxes or other sources, are not sufficient to provide for the full payment of the accruing interest and maturing principle on the Lease each year.”
“KACo (The Kentucky Association of Counties) requires that wording (on a possible tax) as a guarantee the loan will be paid,” said Pulaski County Attorney Martin Hatfield. “The tax would be enacted only if for some reason the county can’t make the loan payments.”