Rising interest rates might move forward action on Lewisburg's five-year capital needs plan.

John Werner of Cumberland Securities, the firm which handles financing issues for the city, advised the council that the cost of financing was increasing and that acting now would save the city money in the long run.

Rates that were as low as 1.75 percent this summer for notes issued to purchase a ladder truck for the Lewisburg Fire Department have risen to a minimum of 3 percent currently.

Werner submitted a resolution to the council for consideration at next Tuesday's regular meeting that would authorize the issuance of no more than $2 million in capital outlay notes with a 12 year term.

That amount would cover the projected costs of the first two years of the plan if the council chooses to fund all of the items. Securing financing now protects the city from potential increases in rates and costs in the future.

The total for the entire five year plan is $3.3 million.

As part of this year's budget process, city department directors assembled a list of capital expenditures needed over the next five year period. The focus was on items that would reach the end of their service life within that period, requiring replacement or renovation.

Included in the first two years of the plan is $600,000 for renovation of the main fire hall, $200,000 for road paving, and $600,000 for replacement of the irrigation system at the Lewisburg Rec Center golf course.

City cost estimates are at the high end of the range and projects are expected to come in under the budgeted amount. No projects are actually funded until approved by the council.

Instead of issuing bonds, the city would essentially be borrowing the funds directly. This method would avoid the added costs required of a bond issuance and would also allow the funds to be repaid early.

The city had originally considered a line of credit arrangement where funds could be taken out as needed over the five year period. That plan was shelved due to the higher interest rate that would be attached.

The list, described by the Municipal Technical Advisory Service, a University of Tennessee department which advises municipalities in the state, as being "minimal" covers building and equipment needs that directors identified as priorities.

Projects with a long term service life can be financed through bonds or capital outlay notes. Equipment needs, such as most vehicles which are not expected to still be in service before the note is paid after 12 years, require cash payment out of each year's budget.