An unauthorized $600,000 loan taken out by the city of Richmond in March was paid off Friday, Oct. 23, according to interim city manager Jimmy Howard.
The loan was taken out in March to help cover ice storm repairs, but the commission did not vote on the matter beforehand, nor was the city’s budget amended to reflect the receipt of the funds.
National City Bank accepted the signature of Richmond Mayor Connie Lawson on the loan document dated March 27.
“That signature generally requires a board of commissioner’s vote, especially in the instances of borrowing funds,” said J.D. Chaney, director of governmental affairs for the Kentucky League of Cities. “It takes a board of commissioners’ vote to bind the city. There should have been a vote prior to the execution (of the loan).”
All legal repercussions of this act, however, were nullified when the commission backtracked at its Oct. 1 meeting by approving the loan.
“The board can ratify an act that may originally not have been commissioned by the board of commissioners,” Chaney said.
The loan was paid with money from the city’s current general fund, according to city finance director Mike Broyles.
“We’re in our revenue cycle and we have the money coming in,” Broyles said.
According to records, the entire loan amount, including accumulated interest, was $601,687.50.
The loan was in the process of being renewed, but Howard and Broyles decided to pay the loan off in full.
The original due date for the loan was Sept. 26, but no late penalties were enforced because the loan was in the renewal phase, Broyles said.
The following list shows all payments that were made from the $600,000 loan: KK & RR LLC, $354,600; Webb’s Car Crushing, $39,625; ABC Tree Service, $33,490; Kenway (Ice Melter Pellets), $955; Master Pitching Machine Inc., $11,107; Eads Fence Company, $4,690; Action Rental Center (Chipper); $37,440; R.L. Curry, $6,305; C.C. Dickson Co., $2,720; Bluegrass Hardware, $4,201.36; RSC Equipment Rental, $2,214.57; Willie Johnson Irvine McDowell Park, $3,437.66; Richmond Paint Center, $30.89; Lowe’s, $431.44; Street Department 148 tons salt, $15,764.96; Overtime fire department, $12,849.78; Overtime police department, $4,388; Overtime street department, $29,764.94.
The total amount spent for ice storm cleanup, according to city records, was $564,015.60.
Lawson and commissioners expect this funding to eventually be reimbursed by FEMA (Federal Emergency Management Agency).
Ronica Shannon can be reached at rshannon@richmondregister.com or 624-6608.
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