Niles council votes to borrow $4.8M

The city will also provide free smoke detectors to city residents.

BY JORDAN COHEN

VINDICATOR CORRESPONDENT

NILES — City council on Wednesday voted to try to borrow $4.8 million for the city Wellness Center and a new pump station and waterlines.

Under normal circumstances, this would be considered routine, but the current crisis in the economy makes borrowing, through the issue of promissory notes, anything but ordinary.

City Auditor Charles Nader warned that tight credit raises the possibility that there will be no bidders for the notes.

“If nobody bids on [the notes], then we will have to pay it off out of our general fund,” Nader said. “We have enough money to cover, but we’ll only have a balance of $1 million left in the fund if we have to pay it ourselves.”

The ordinances authorize the city to sell bonds if it chooses, however Nader cautioned council against it.

“[Bonds] lock us in for years, but notes enable us to pay down in advance and save money in the long run,” Nader said, adding that he would have recommended going with bonds if the city lacked the funds in the event there are no bidders.

The auditor’s other concern is the interest rate, which is capped by each ordinance at 5.5 percent. That is well above the rates of 3.5 percent and 2.6 percent the city paid last year. Nader would not speculate on the probability of equally low rates this time.

“I’m hoping for 3.5 percent or lower, but we must have two bids for that to happen,” Nader said. “I do feel [Niles finances] are strong enough to sell even in these conditions.”

The auditor, asked to estimate the likelihood of a sale, said he puts the city’s chances at “98 percent.”

In another item, Fire Chief Gary Brown announced that his department will provide free smoke detectors to any Niles homeowner who wants one on “Make a Difference Day,” which is Oct. 25.

“I call this free life insurance because you don’t realize how many lives are lost by not having these detectors,” Brown said. “It’s only costing my department around $200 and I think it’s the cheapest and best investment I can make.”

Brown said that under city ordinances, the free detectors are limited to homeowners. Landlords do not qualify.

“Make a Difference Day” is described as a “national day of helping others.”