Oxford aldermen consider up to $25M loan for ice-storm recovery

Oxford aldermen voted to let city legal counsel prepare a resolution that would authorize emergency borrowing of up to a not-to-exceed $25 million to cover mounting costs from the recent ice storm, primarily debris removal and related recovery expenses. City leaders said the loan would be structured to limit immediate interest costs and to allow the city to draw funds only as needed.

City Attorney Pope Mallette told aldermen state law permits municipalities to borrow outside normal budgetary limits in emergencies. Mallette described a borrowing mechanism that would let Oxford draw funds incrementally and pay interest only on amounts actually used. “You all are going to need to front significant money before FEMA and other money is coming,” Mallette said. He added, “It’s not a line of credit, but you only draw down as you need it,” and noted that only the amount drawn would count toward the city’s bond debt limits.

Officials have consulted financial and legal advisers and plan to structure the borrowing by issuing a request for proposals from banks. Aldermen approved the city attorney’s request to move forward with drafting the resolution; the measure is expected to be presented for consideration at a future Board of Aldermen meeting.

Mayor Robyn Tannehill framed the proposed cap as reflecting the scale of the recovery work, particularly expensive debris removal. She expressed concern about advancing large sums without a major disaster declaration but said she had received reassurances from federal staff. “I has kept me up at night, without a major disaster declaration, fearing that I’m signing on to something that we may or may not be able to be reimbursed for, but I’m assured from White House staff that if the governor asked for a major disaster declaration, that it would be granted,” Tannehill said.

For Lafayette County residents, the loan would help the city keep crews and contractors on payroll and accelerate pickup of downed limbs, damaged trees, and roadway cleanup that can block traffic and slow access to homes and businesses. City officials expect that much of the recovery cost could eventually be reimbursed through federal disaster aid, which would reduce the long-term fiscal impact on the municipal budget.

Next steps include completion of the resolution by legal counsel, issuance of an RFP to potential lenders, and a future aldermen vote on authorizing the borrowing. If approved, the borrowing will allow Oxford to draw funds as storm-recovery invoices arrive rather than seeking full funding upfront, a structure officials say will help manage cash flow while federal reimbursement is pursued.