The City of Akron and Summit County may guarantee a loan for the Akron Urban League under a refinancing deal aimed at saving the agency money.
The Development Finance Authority of Summit County, formerly the Summit County Port Authority, issued $3.6 million in bonds to the Akron Urban League to help pay for its new building in 2006. To secure the payment of the bonds, the city and county backed a letter of credit to Fifth Third Bank in 2007. The guarantee was split 50/50 by the city and county.
Akron City Council and Summit County Council are considering legislation that would replace this previous agreement with a new guarantee of a term loan from Fifth Third Bank for $2 million to refinance the bonds and a $100,000 line of credit to help the Urban League with operating expenses. The city and the county would again evenly split the guarantee.
“This continues the commitment the city made to the Urban League,” said Akron Finance Director Diane Miller-Dawson.
Neither city nor county council voted on the proposed legislation Monday, but both are expected to take action in the next two weeks.
Fred Wright, the Urban League’s executive director, said the refinancing deal would save the agency about $52,000 a year in fees and interest for 20 years, or about $1 million.
“The goal is to pay it off sooner,” he said of the loan.
Since Wright took over as executive director three years ago, he said he has been working on getting the agency’s finances in better shape. He said the agency has an annual budget of about $2.4 million and receives much of its funding toward the end of the year, which makes the first half of the year challenging. He said the line of credit would help address this problem.
Councilwoman Linda Omobien said Fifth Third Bank wanted Wright to show he could come up with a budget and he did. She said he has “managed the coffers well.”
Councilwoman Margo Sommerville said Wright has worked hard and made raising money and lowering the agency’s debt his top priorities.
Stephanie Warsmith can be reached at 330-996-3705 or email@example.com. Follow on Twitter: @swarsmith and on Facebook: www.facebook.com/swarsmith. Read the Beacon Journal’s political blog at www.ohio.com/blogs/ohio-politics.