Support grows for city’s central office efforts Borrowing limits won’t be a factor at Salisbury’s current debt level

Published 12:00 am Saturday, February 9, 2013

SALISBURY — Since City Council endorsed the concept Tuesday, enthusiasm has grown for the idea of Salisbury borrowing $8 million on behalf of Rowan-Salisbury Schools to build a downtown central office.
Mayor Pro Tem Maggie Blackwell said in her more than three years on City Council, this idea has generated more responses than any other.
“This is the one item I’ve had the most feedback on yet,” Blackwell said. “I’ve had high fives, Facebook messages, telephone calls — all saying thank you for showing leadership. Not one negative comment.”
One day after Rowan County commissioners pulled the plug on borrowing money for the central office, citing massive soil contamination at the site, City Council voted unanimously to authorize City Manager Doug Paris and his staff to explore a partnership with the Rowan-Salisbury Board of Education.
The school system would pay back the loan with state sales tax earmarked for capital outlay. How the loan would be structured, how long repayment would take and other details have not been worked out.
Paris and John Sofley, assistant city manager for finance, plan to meet with school officials, then report back to City Council.
Sofley said the city has the financial capability to borrow $8 million, and no rule or law prevents the city from borrowing money on behalf of the school system, which is legally barred from borrowing money.
The city’s outstanding debt is well below the allowable limit, Sofley said, and state law gives cities the authority to borrow money to build office complexes.
The 2012 audit shows Salisbury is at 21 percent of the city’s $223 million debt limit. The city has total net debt of $47 million, for a legal debt margin of $176 million.
Salisbury’s debt jumped from 8 percent in 2008 to 22 percent in 2009, after the city borrowed $36 million to launch Fibrant, a fiber-to-the-home high-speed broadband network. But the city’s net debt remains less than a quarter of the legal limit.
Calling this council “aggressive,” Mayor Paul Woodson said the five members want what is good for the city, Rowan County and the school system, which has asked for a consolidated central office for 23 years.
“We would love nothing better than to have a beautiful central office in this community,” Woodson said. “We will do anything we can to make this happen.”
Downtown advocates say building the $8 million, 62,000-square-foot facility in the 300 block of South Main Street would bolster the economy and bring private development to the south end of the city’s central business district.
Cleanup of the former service station site continues, and the city has removed seven orphan underground fuel tanks and excavated more than 3,500 tons of contaminated dirt. The cleanup is expected to cost about $500,000. The state will reimburse that after the city pays a $20,000 deductible.
Councilman William “Pete” Kennedy said he’s heard from residents who are pleased with the idea of the city stepping in to help the school system build the central office.
“They just feel that it’s time to put this particular issue behind the citizens of Rowan County, and I really concur,” Kennedy said.
If City Council members vote to move forward, they will not be spending any of the city’s property tax dollars, he said.
“It’s more or less a pass-through for the Rowan County school system to get them where they want to be,” Kennedy said. “Definitely, I support it.”
Councilman Brian Miller said from the beginning, the city has tried to provide a solution to the problem of having no central office. The city offered to donate $500,000 worth of land and parking to the county for the project.
While he’s waiting to see the details, Miller said he’s “very much in favor” of a downtown central office and finding an arrangement that would be agreeable to both parties.
“We have an obligation to understand it before we do it,” he said. “… It has to make sense.”
Almost everywhere he’s gone since Tuesday, Miller said people have stopped him to comment on the project and express appreciation for City Council’s leadership. “I think after 23 or 24 years, it’s time we get it done,” he said.
City staff will meet with school system staff to hash out the terms and safeguards of the intergovernmental agreement, Paris said.
“We would be co-signing on a loan that the school system would fund,” he said. “In that situation, this doesn’t have an impact on our debt. It doesn’t impact our budget.”
The city would hold the title to the building until the school system could buy it, likely after two or three years, Paris said.
Paris said he was glad that Jim Sides, chairman of the Rowan County commissioners, did not protest the concept of Salisbury borrowing the money for the school system during a meeting Thursday between commissioners and the Board of Education.
“I was pleased when I read Chairman Sides’ comments, where he basically gave his blessing to the idea,” Paris said.
During Thursday’s meeting, Sides said the downtown central office is a dead issue for commissioners, who voted 3-2 to halt funding plans for the South Main Street project.
Sides also addressed any possible speculation that commissioners were concerned about Salisbury borrowing money for the central office.
“We don’t care if you make a deal with the city and they build you a building,” he said. “We don’t have a problem with that.”
Sides has said repeatedly during negotiations that he considered the city a special interest group, not a stakeholder, in the central office project. He refused to call a special meeting of the Board of Commissioners for a joint meeting between the county and school system because the city also was invited.
No City Council member seemed concerned about damaging the city-county relationship by pursuing the central office project.
“Throughout the process of exploring this building for the last year and a half, we have been polite, we have been courteous, we have extended beyond the olive branch at every turn,” Blackwell said. “We have sought to meet with them to mend the relationship, and they publicly said they didn’t care about us.”
The city has given the county the best offer they have on the table, at a time when building costs and borrowing rates will never be better, Blackwell said.
“For the sake of our city and our county, for job creation and tax revenue, we feel that this is a good time to go forward,” she said.
Contact reporter Emily Ford at 704-797-4264.