Board withdraws financing application for West End Plaza
An untold number of people planning to turn out in front of Rowan County commissioners at 7:30 p.m. Monday and weigh in on the mall purchase officially were out of luck four hours earlier.
Following a motion made by Commissioner Craig Pierce at the board’s 3 p.m. meeting, the board approved withdrawing the county’s application to the Local Government Commission concerning the financing of West End Plaza.
Commissioner Chad Mitchell’s subsequent motion to strike the LGC-required public hearing on the agenda was passed.
Commissioner Jon Barber voted against both motions.
The nixed hearing on the financing for West End Plaza was slated as a follow-up to the heated initial hearing on May 19.
After making the motion to withdraw the application for West End Plaza financing from the LGC, Pierce said he was in favor of sending in a different application.
“We are working on some other things that we want to submit with the new application, and we are waiting for those pieces of information to come together so that we can present it to the board,” Pierce said. “The application, as we have it set right now, is not what I would like to send in for the funding.”
County Manager Gary Page seemed taken aback by the motion.
“Tonight, we had scheduled a public hearing to talk about financing and the application,” Page said.
The LGC notified Page last week the county’s application was being removed from their monthly meeting today.
The budget has to be passed by July 1.
“I asked (the LGC) if they didn’t take action (today), does that mean they will take action the first meeting in July. They did not say ‘yes’ or ‘no,’” Page said.
If the LGC approved the financing in July or August and the county moved forward with closing the deal, Page wanted to know if the county could pull the loan money back into this year’s budget.
“Their reaction was ‘no.’ By withdrawing the application, that means that, in the event (commissioners) submit another application down the road, it won’t do anything to replenish this year’s fund balance,” Page said.
The half-cent tax increase, relocation of county offices to West End Plaza, renovations and the borrowing of money were all geared toward getting the county fund balance to 12 percent by June 30, Page said.
The process, Page said, was designed to keep the new commission members elected in the fall in a position where they were not “behind the eight-ball with a 9 percent fund balance.”
If the county had moved forward and had the loan approved, Pierce said, the money still would not be dropped into the county’s 2013-14 budget.
“It’s not going to hit the fund balance in time to be considered on a loan application anyways. It’s really not going to serve the purpose that we intended it to,” Pierce said. “Rather than move forward with this particular application to the LGC, I would rather re-wrap it with some other items that we would like to do that would not affect the fund balance.”
The county purchased the former Salisbury Mall in December for $3.425 million, pulling the money from fund balance. Page said the loan is aimed at putting money back into reserves “to make the county more sound and for it to be in a better position for the next board.”
“The bottom line is, you purchased the mall in December and the money was paid in December. We own the mall. That part is over,” Page said. “This was just about putting the money back in reserves to let the county have the best rating it could have, be able to do whatever the future board wanted to do and have the best face before we went and borrowed $40 million for the schools.”
Pierce said the county waited on the schools in deciding when to pull the trigger on the loan.
“We kept being told they needed $6.5 million, and we were going to borrow everything on one application to save the funding costs of the LGC application,” Pierce said.
Had the capital improvement funding issues with the Rowan-Salisbury School System “not have been a political football,” Pierce said the county would have been able to secure the loan earlier and have it in this year’s budget.
The timeline was pushed out through prolonged mediation, Pierce said.
“Originally, we were going to borrow this money back in December, but we held off because we did not want the additional cost of having two applications,” Pierce said.
Commissioners probably would have closed on the financing with the LGC in January, Page said, if they hadn’t listened to him.
“I kept saying we don’t want to do two applications. We would like to be able to borrow the money with the schools at the same time and put the staff through half the pain it goes through to put all this stuff together,” Page said.
The county manager apologized to Rowan County Board of Commissioners Chairman Jim Sides for asking the board to put the mall financing issue off as he never meant for it to be a campaign issue.
“We never thought it would be, but that is OK,” Sides said. “Where we are is where we are.”
Sides, who was seeking re-election this year, lost in the primary.
Barber asked if Pierce was willing to consider an amendment to his motion stipulating staff would be delivering to commissioners an exit strategy for how the county would get out of the mall deal while additional information is being collected for the second application.
Pierce replied with a firm “no.”
“Then it sounds like, to me, we are calling in the cavalry and it’s about time we stop watching reruns of F Troop,” Barber said.
Sides banged his gavel and declared Barber out of order.
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