Council mulls refinance of City Hall project
$542,266 will remain due next year on original note from 2002  

By MIKE BROWN
Reporter Editor

 City council members are studying a plan to refinance City Hall, a former bank building on which the city still owes in excess of one half million dollars.
 Council members discussed the situation in a special meeting Thursday at City Hall, which was purchased for $600,000 six years ago.
 Mayor John Shoemake said the city plans to make a $42,266 payment on the building in September, leaving a $542,266 balance due in September, 2009. At that point the city is required to refinance the original 7-year note.
 “It looks like we could save up to a full point on the interest rate if we refinance now,” Mayor John Shoemake said. “That’s what our financial advisor, First Southwest, is recommending.”
 “We haven’t taken action on that proposal,” he said. “It’s one of our options. Frankly, we’d love to have more money to work with but we just don’t have it.”

Original note
 City Secretary Shelli Turner said the original 2002 note was for seven years and comes due in 2009. “At that point we would have to refinance anyway,” she said.
 Shoemake said financial advisors believe interest rates have currently stabilized. “We’re probably looking at something like a 4.5-percent rate now, opposed to a 5.5-percent rate in another year.”
 He said a 15-year payoff is envisioned when the building is refinanced.
 Shoemake said the original note was for more than the $600,000 cost of the building.
 “There was also some renovation at the old City Hall which turned it into the police station,” he said.

Controversy
 The building’s purchase generated some controversy. The structure was built as Community Bank & Trust in 1979-80 and later became Citizens National Bank (CNB).
 In January, 2002, CNB acquired the IBC (former NBC) banks in Rockdale, Taylor and Giddings and announced it would move into the IBC Bank building downtown at the US 79-Ackerman corner.
 The 7,700-square-foot building being vacated at Wilcox and US 79, and its two-acre lot, was offered to the city for $600,000.
 Opposition to the idea was expressed at two city council meetings but the purchase was approved on a 4-2 vote on March 4, 2002.
Executive session
 Council members on Thursday took no action after an executive session to discuss “pending or contemplated litigation.”
 Neither Shoemake nor interim City Manager Randy Holly would comment on the situation.