Mercier Kilo TT is fairly inexpensive but it's a very good bike, should last a very long time and with good resale value if it ever came to that. Other than that I would just do a conversion. I bought a Miyata touring bike for my girlfriend for $30 and just spent money on a chain, freewheel, and some maintainence. I also got a top tube pad for good measure but you certainly don't need that.

If you have any questions about doing a conversion yourself there are tons of threads in here, just use the search. If you don't find your answer you can always ask.