BAY MINETTE — Finance was again the main topic of conversation for the Bay Minette City Council as the group convened for a special-called meeting Monday morning to discuss capital needs and how to fund them.

Joe Landenwich, city financial officer, introduced the list of budgeted capital items for all departments during the regular council meeting March 1. However, a disagreement about how to pay for the items ensued and council members decided to table the issue until Landenwich could put together several options to present to the council.

The issue before the council was whether to finance the items or pay cash. Because the items were budgeted, District 2 Councilman Mike Phillips felt they should be paid for out of the capital fund rather than borrow.

Landenwich explained that should they do that, the city could find itself in trouble if an emergency, such as a natural disaster or a new industry needing infrastructure or other needs that could be met with capital expenditures.

At the center of discussion was Bay Minette Police Chief Michael Rowland's amended request for seven police cars as opposed to the five originally requested. Rowland said two could wait until next year, but said the city would come out better buying all at one time.

"The operating life of these cars is five years. We do have some older than that, with more miles, but I'd like to get back to rotating them out every five years," he said. "We have some cars that are eight years old, have nearly 200,000 miles on them and have had multiple transmissions put in them."

The estimated cost per car is $30,000, meaning approximately $210,000. The total estimated cost for all capital purchases is $389,000, to include seven police cars, one fire department truck, one public works truck and two grounds tractors.

The list was agreed upon fairly easily, but the method of payment was not. Despite numerous opinions from various financial officials, Phillips was not happy with the idea of financing the purchases.

"I still don't understand why we're going to borrow when we have the money," he said. "We had a gentleman come in last week and said we were in good shape, why do we want to mess that up by borrowing?"

Landenwich said the capital fund is currently $600,000, and the reserve fund was about the same. He showed council members a financing option of two years at 2.7 percent interest rate vs. paying cash.

"We're not necessarily in a position where we have to finance, but the opportunity is here for a low rate," Landenwich said.

In the end, the list of items was approved to be put out for bid and the motion to finance the items with a two-year loan was approved, with Phillips as the lone dissenting vote.

District 1 Councilman Danleigh Corbitt, North Baldwin Utilities’ Jason Padgett and CPA Jerry Bundy, who conducts the city's annual audit, agreed with Landenwich’s position.

"I'm all for pay as you go, but you have to look forward and look down the road, Bundy said. “You don't know what will happen, and at 2.7 percent, you're probably not going to be able to get that again.”

Phillips asked how each department’s budget would reflect the decision to finance the expenditures, since all items had been budgeted for.

Landenwich said the individual department budgets would be amendended to show the amount of the purchase taken out, and that money would either be transferred to the reserve fund or the capital fund.

In other business, mayor Jamie Tillery introduced a proposed resolution that would offer support for the H.R. 1264, also known as the Multiple Peril Insurance Act of 2009.

The bill is in response to insurance companies' refusal to offer wind damage insurance at a reasonable cost, or some companies' full withdrawal from Alabama's coastal areas.

"As one of the states most notoriously affected by wind-oriented natural disasters, it is in Alabama's best interest that all of her citizens have access to affordable and dependable insurance coverage," the resolution states.

"(The resolution) was requested from (state Rep.) Joe Faust (R-Fairhope) to uphold the bill. He has asked that we send a copy to Jo Bonner, Jeff Sessions and Richard Shelby," Tillery said.

If passed, the bill would amend the National Flood Insurance Program to allow homeowners the option of purchasing wind and flood insurance in one policy.

Before adjourning, the council approved a request from District 3 Councilman Johnny Biggs to transfer $600 from his contingency fund to Facilities Maintenance Supervisor Ronnie McDill for improvements to Brownwood Park.

District 5 Councilman Chris Norman asked about a very large pothole on West Hickory Street and asked if it could be fixed. Public Works Supervisor Lamar Hadley said he would address it.