The city council Monday night voted to approve the resolution that will retire bonds, eliminating the remaining debt holding the city down.
When the city began the current fiscal year in July 2010, Emerson held two notes and three bonds. A small water/sewer note was costing the city $1,517 per month, and $2,833 was paid out each month on a garbage truck loan. Those were paid off through normal amortization.
Emerson was then left with three bonds. A 1972 bond for the oxidation pond at 5 percent was costing $5,000 per month. The city also held a 5 percent bond on a 1978 note for the water treatment plant and one for 3.25 percent from 2002 for the wastewater treatment plant. The total payoff was $657,581.
Using $514,977 from a sinking fund and $142,604 from unrestricted cash, Emerson paid off the three bonds. The city now has $277,283 in unrestricted cash, which means it can be used for any purpose.
"We decided we are just going to clean all our debt out, get rid of these three bonds," Mayor Al Pallone said. "There were no earlier payments fees; we made sure of that before we did this to make sure we weren't going to lose anything by doing this."
Now that the debt has been eliminated, the city will continue to set aside money each month. Between $2,500 and $7,500 will be placed into the sinking fund each month, or between $30,000 and $90,000 per year.
"We recognize that we are going to have the need for some big maintenance on systems," Pallone said. "Instead of having a sinking fund, we are going to actually have a fund that grows. We are going to be putting a minimum of $2,500 -- up to $7,500 -- a month into that fund, depending on what the situation is.
"We are going to be putting money into that fund to build it up so if we have a big expenditure we'll have coverage for it because SPLOST can't always cover it."
While the payoff will allow the city the opportunity to borrow in the future, Pallone said the city has no plans to "turn around and borrow again."
"Having those loans wasn't doing us any good. It was really money going out the door to pay interest that you can't get anymore," he said.
Emerson will now focus on larger projects such as the city's aging infrastructure.
"We have the problem that a lot of other communities have. We know these things are going to happen, ... we know there are going to be needs," the mayor said. "We are still going to be in a reactive mode. ... We are not going to use it for minor stuff; we are going to try to keep that reserve for major stuff.
"It's going to take us a while to build it up."
Although the city's financial situation is looking brighter, Emerson took a pessimistic approach to the budget adopted Monday.
Coming in almost $200,000 less than 2010-2011, the budget cuts every expense area except the municipal court and garbage accounts. At $1,685,985, the plan is 10.2 percent lower than the current budget of $1,876,573.50.
Revenue in each of the three areas -- general fund, water and sewer, and garbage -- either decreased or remained the same. The general fund shows almost $100,000 less in revenue in the coming year. The water and sewer fund decreased by $121,523, from $597,223 in the current year to $475,700.
A drop in city wages was attributed to positions not being filled, no pay raises and department heads minimizing overtime. City Manager Kevin McBurnett said last month that the city has not lost positions.
Pallone said the city also looked at cutting back and becoming more efficient in the police department to aid the budget. The Emerson Police Department saw a drop of roughly $50,000 in its budget from 2010-2011 to 2011-2012.
The 2011-2012 budget will take effect July 1.
Also Monday, the council:
* Approved the 2011-2012 confiscated assets budget.
* Held a first reading on a variance request made by the Bartow County Board of Education to reduce the speed limit from 45 mph to 25 mph on Old Alabama Road in front of the new Emerson Elementary School. Bartow County Schools' Director of Construction and Planning Rick Little said during last week's BOE meeting that the decrease in the speed limit will allow for the construction of shorter acceleration and deceleration lanes, saving the county money.
* Voted to enter into a sewer service agreement with Cartersville. The two cities currently have an agreement whereby Cartersville accepts up to 2 million gallons of sewage.
* Approved an amendment to the sewer service agreement, which says Cartersville will accept an additional 1.85 million gallons contingent on the LakePoint Sports development.
* Approved a resolution adopting the fee schedule/preset bond for certain offenses.
* Held a first reading creating a chapter 31 of the code of ordinances dealing with records retention. The policy will bring the city into accordance with the Secretary of State's recommendations.
* Held a first reading of a "cleaned up" alcohol beverage ordinance. Pallone said the current ordinance is a patchwork of several policies.
* Voted to approve a special use permit for Gibson's Welding and Fabrication at a Highway 293 location near Doug's Place. The special use permit allows the business to store items in a fenced area on the property with the stipulation that the fence be covered with slats or mesh to block the materials from view and the facility will not be allowed to conduct business outside.