By Seth Schmidt
The City of Tracy will likely obtain a $250,000, no-interest loan to help pay for “extraordinary” expenses related to the early July flooding that inundated the city.
The loan program is offered through the League Of Minnesota Cities Insurance Trust. No interest would be charged on the principal for up to a year. A three-percent interest charge would go into effect on balances that remain after a year.
“I think we can use the $250,000 pretty quickly,” said City Administrator Kris Ambuehl, who recommended the loan program to the council.
The administrator sees the League Trust loan as short-term financing. Within “three to six months,” Ambuehl said, the city should be able to settle flood-related loss claims with its insurance carrier. Hopefully, he added, Tracy will also qualify for some amount of state and federal flood relief. The combination of insurance settlements and flood relief payments, Ambuehl said, could then be used to pay off the $250,000 League Trust loan.
The loan can be used to pay for unexpected expenses such as refuse disposal, uninsured flood damage to city buildings, and storm clean-up expenses.
Council members saw the loan as a risk-free opportunity.
“It is free money,” said councilman Dave Tiegs, who pointed out that the city can return a portion of the $250,000 loan, if the entire amount isn’t needed.
“I think it is a good idea,” agreed Tony Peterson.