STURGIS, S.D. – The Sturgis City Council approved a capital improvement line of credit with First Interstate Bank Monday night.
The move comes as the city is working to complete two large capital improvement projects. One is the reconstruction of the 7th Street Crossing and the second is the complete reconstruction of East Main and Sherman Street.
The 7th Street crossing project will be reimbursed by FEMA and the East Main and Sherman project will be financed through sales tax receipts, utility fees and property owner participation. The revenue from these sources will be generated over the next two years and in the case of the property owner participation, five years.
These two large projects will have a significant impact on the city’s available cash flow, and the city wanted to be ready for a worst-case scenario. Such a scenario, according to Sturgis City Manager Daniel Ainslie, is needing cash while waiting for a reimbursement.
The city was seeking the added credit line so it had access to guaranteed funds at a low-fixed interest rate should it be necessary.
The proposal with First Interstate Bank is a capital improvement line of credit for up to 5 years with a fixed interest rate of 5.01-percent. The city would have access to the funds should it be necessary.
