From the Mayor’s Desk
BY JEFF WASHBURN
City of Dresden Mayor
In October, the City of Dresden had two very significant accomplishments in regard to the financial strength of our city. Both accomplishments involved paying off debt owed by the city.
The first debt payoff was the final payment of a loan that the city acquired to purchase a five-acre tract of property on American Drive in October 2018. The original loan was for $110,000 at an interest rate of 0.70 percent. This loan was paid in full on October 8.
The second debt payoff occurred a couple of weeks later in October when the city paid off a loan with a balance of $99,276.00. This loan originated 21 years ago, and the amount originally borrowed was $301,457.00 for street light installation on the new four lane section of Highway 22 in the Dresden city limits. The original interest rate was 4.70 percent. A few years back during my tenure as Mayor, I recommended that we refinance the loan which still had 24 years left on the original 40-year loan when it was refinanced. The city was able to refinance the loan at 3.08% and get a payoff schedule with only 12 years remaining on the balance of $130,193.44 at the time of refinance. In October, I recommended based upon the advice of our auditor and the city board authorized paying off the loan from surplus funds that we have accumulated in the General Fund that were drawing no significant interest. This action will save the city a large sum on future interest payments that will now not have to be paid as a result of the advanced payoff.
Those are city tax dollars being saved that can be used for other city projects in the future such as a new fire station and an expansion of our city park program to accommodate more activities.
The City of Dresden currently has only one debt remaining to be paid prior to the city being completely debt free. In October 2020, the City of Dresden purchased a new fire engine for the fire department at a cost of $297,000 and after applying funds that we had been budgeting for the past few years toward the future purchase and a discount for prepayment at the time of purchase, the total of the loan was $222,000. The current balance on the principal of the loan is $178,000. It is my personal goal that this debt be paid off in October 2022, once again using surplus funds from the General fund. The unpaid balance in October 2022 will be $134,000. If the City of Dresden becomes debt free in October 2022, this will be an accomplishment that few cities or other governmental entities can claim.
The City of Dresden has accomplished this through good financial management not only during my tenure in office, but during the terms of office of several past Mayors of the city. This history of good financial management has enabled the City of Dresden to have the lowest property tax rate and utility rates of any city in Weakley County, which is no small feat as the city has been progressive in maintaining and improving our infrastructure at the same time.
I do not have and the citizens of Dresden should not have the illusion that the City of Dresden will remain debt free once this one remaining note is paid off. Certainly the city will have to borrow money in the future if a new fire station is built, our parks and recreation program is expanded, or our water and sewer system undergoes renovations and expansions. All of these will be expensive projects and the borrowing of funds will certainly be necessary to continue growing and improving as a city.
What becoming debt free will mean to our city, if we are able to accomplish that goal next year, will be that we will be in an excellent position to acquire new loans or bonded debt at very favorable interest rates in the future and be able to service that debt without putting a strain on the taxpayers.
We will also be able to continue our current program of repaving streets and working to make our city more beautiful and adding events in our city, which are also important objectives as well.
As your Mayor, I thank the citizens of Dresden for your support and encouragement to keep on the course of making Dresden a great place to live, work, and raise our families. Together, we can make our community an even greater place to live.