The Kalispell City Council on Tuesday authorized a loan for up to $375,000 from the Montana Board of Investments.

The loan passed by a 7-1 vote. Council member Bob Hafferman voted against it and Kalispell Mayor Tammi Fisher was not present.

Money would be used to buy equipment and improve cash flows in the city’s parks fund and forestry fund and the street maintenance and light maintenance special assessment funds.

Hafferman said the project makes “no sense whatsoever” and that Kalispell should pay cash for needed equipment when it can afford to do so.

“It just adds to our credit card debt over the next five years,” Hafferman said. “We’ve already got quite a bit of debt.”

Council members approved the equipment purchases as part of the 2012-13 budget and in that document anticipated borrowing money to make the purchases to take advantage of record low interest rates.

Planned equipment purchases include a mower, used truck and stump grinder for the parks department and a bucket truck and two used tandem-axle dump trucks for the streets department.

Without the loan, City Manager Doug Russell cautioned that equipment purchases made from the forestry and light maintenance funds could have reduced those funds’ projected end-of-year balances to just $11,000 or less if people fall behind on property taxes.

The loan is for up to five years. Its variable interest rate starts at 1.25 percent but can be adjusted every six months as market conditions change. The loan also can be paid off at any time with no prepayment penalty.

Council member Phil Guiffrida III said he agreed with Hafferman’s concerns and added that he, too, supports pay-as-you-go government. As the city hits its targeted 20 percent cash reserve balance, such purchases should be made with cash on hand, he said.

“That said, the loan is in the budget. It’s a great initial interest rate and we have the ability to pay it off early. Being it was approved by a majority in the budget and we’re not at our reserve cap yet, I will support this tonight,” Guiffrida said.

IN OTHER business on Tuesday, the City Council voted 7-1 to adopt a zoning text amendment that makes public schools, jails, fairgrounds and police and fire stations permitted uses in all city zones.

Such uses were listed as conditional uses in Kalispell’s zoning ordinance. Montana law lets state agencies claim agency exemption from all local zoning regulations if they choose. Over the last 10 years, most state agencies with projects have done just that when facing Kalispell’s longer and costlier conditional use permit process.

With the change, city officials hope state agencies will not claim their exemption and agree to comply with Kalispell’s zoning regulations and go through its normal development channels, including Site Review Committee and Architectural Review Committee.

Hafferman voted against the change.

Council members also voted to postpone action on the purchase of a vehicle that would be used to transport the city’s hazardous materials personnel and equipment. Staff asked for more time to review two bids.

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.