Muskogee Council Opens Loan Talks to Cover $29.25 Million Debt

Muskogee City Manager Kendal Francis and the city attorney received authorization on Nov. 4 to open loan negotiations with the City of Muskogee Foundation. The council voted during a special meeting to explore this financing option to address outstanding legal judgments. The move aims to settle debts without raising property taxes for local residents.

The city faces three separate judgments totaling $29.25 million, plus interest. These costs stem from properties the city previously condemned and demolished. Mayor Ryan Lowe stated that the proposed loan offers a new path to handle the liabilities. He said the primary objective is to keep the financial burden off the backs of taxpayers.

The urgency of the situation is driven by daily interest accrual. Lowe noted that approximately $7,000 in interest is added to the total debt each day. This growing balance has created financial uncertainty that extends beyond the city’s immediate obligations. It has also influenced decisions made by other local entities regarding their own funding plans.

Muskogee Public Schools recently paused its timeline for a potential bond election. The school district cited concerns about how the city’s judgments might impact property tax rates. The district wanted to avoid competing with the city for taxpayer support during a period of high municipal debt.

The City of Muskogee Foundation had previously turned down a request to pay the judgments directly. However, the foundation did approve a separate grant to help cover operating expenses. That grant provides $10 million over five years, or $2 million annually. The current council action marks a shift toward seeking a loan structure rather than a direct payout.

Local resident Bill Day expressed concern that rising taxes might force him to relocate. He compared potential costs in Muskogee to those in Broken Arrow, a nearby suburb. Day said he would consider selling his home if taxes rose to match levels in neighboring communities. He stated that avoiding a tax increase would determine whether he stays in Muskogee.

No loan has been formally approved yet. The council’s vote only permits officials to begin discussions with the foundation. City leaders have not provided a specific timeline for reaching a final agreement. The next step involves detailed financial talks between the city staff and the foundation representatives.