Trussville borrows to pay off bond issue, lower interest rate
By Scott Buttram
The Trussville City Council met Wednesday evening in a called meeting to authorize Mayor Gene Melton to take out a loan with Compass Bank to pay off a bond issue of $4.975 million with 10 years remaining on the debt obligation.
The current interest rate on the bond issue is 4.1 percent, escalating to 4.875 percent over the next 10 years. The interest rate on the loan from Compass will be 2.43 percent.
“Banks have cash to loan,” Councilman Alan Taylor said. “This brings the bank a better return than they can get elsewhere and it lowers the city’s interest rate substantially.”
The bonds were issued in 2003 to pay off 1996 warrants for parks, fire trucks and drainage.
In addition, the council approved a liability and property insurance policy with R.L. Best Insurance for $277,787.