County government no longer seeking mall loan

Published 12:00 am Friday, October 3, 2014

EDITOR’S NOTE: This article has been amended to correct the date when a mall loan was needed by.
The Rowan County Commissioners have dropped their bid for a West End Plaza loan, instead leaving any decision making up to the next board.
After the Local Government Commission delayed a decision on allowing Rowan County to replenish its fund balance, which was reduced by $3.4 million to pay for the former Salisbury Mall purchase, county commissioners have decided to drop the request altogether.
The LGC initially said it would delay a decision for at least 60 days, taking it up in October at the earliest, but its Oct. 7 agenda does not include Rowan County.
When asked about the loan’s absence from the agenda, Rowan County Board of Commissioners Vice-Chairman Craig Pierce said four of the commissioners had informal discussions about whether to re-submit a request to the LGC and ultimately chose to wait until new board members are elected. Commissioner Jon Barber said he played no role in deciding to drop the loan request. Pierce confirmed that.
Though part of the reason was waiting, Pierce said another reason for not submitting the loan request was the start of a new fiscal year in July. He also focused on a letter from several commissioner candidates that ask the LGC not to grant the loan request.
“We decided to not even ask for the money, to not even reapply,” Pierce said. “What’s going to happen is that the new commissioners are going to deal with a lower fund balance than they could have had. Let the new board find out what they’ve done to themselves.”
It’s not clear exactly when Rowan County government decided not to apply for the loan. Pierce and commissioners Mike Caskey and Chad Mitchell said conversations about dropping the loan request happened individually, at different times. Mitchell said the conversation to drop the request took place before former county manager Gary Page retired on Aug. 29, though Mitchell described conversations as not serious or lengthy.
“It was basically just talking around with Gary,” Mitchell said. “It was almost individually or at least separately that we basically came to the conclusion that there’s no rush to do it anymore. With the rush gone, why build any ill will?”
Mitchell and Pierce said the most important deadline was June 30, as it was the last day of the 2014 fiscal year. If achieved before June 30, the loan and mall purchase would be reflected in the same fiscal year. The fund balance amount reflected in the county’s 2014 fiscal year audit would also be unchanged.
In a letter dated May 15, Page requested the LGC approve Rowan County’s request to take out a nearly $4 million loan — money to cover the mall’s purchase and a portion of renovations. In the letter, Page requested the LGC’s approval on June 3.
Pierce said Thursday that, ideally, the county would have requested the loan’s approval shortly after the mall purchase, but commissioners waited because of ongoing discussions with the Rowan-Salisbury School Board.
The Local Government Commission didn’t approve the loan at its June meeting, which resulted in a resolution — approved July 7 — from the Rowan County Board of Commissioners for immediate action.
“Rowan County has proposed an application to the LGC that would allow the county to continue to sustain its AA bond rating while expanding economic development,” the resolution states.
Shortly after, the LGC responded with a letter that stated it would delay approval.
“Staff recommendations not to approve are unusual, especially when an application is made by such a well-managed unit of government,” the July 29 letter states. “However, there are unusual circumstances surrounding the application and the LGC staff does not feel that all of the required statutory findings can be made regarding the financing under North Carolina law.”
The July 29 letter specifically cited uncertain public support as a reason for the delay.
With the loan request dropped, commissioners could receive a letter from the LGC stating that its fund balance is below the required 8 percent, Mitchell said.
Barber, who was upset the other commissioners did not consult him before dropping the loan application, said the delay was the right move, but added that the county might run into trouble paying its bills shortly after commissioners change.
“We are at a critical point in terms of how we are going to pay our monthly bills,” Barber said. “This could all have been avoided if they had engaged the public from day one. We have a sufficient fund balance to keep providing the services to our citizens, but once you start to get beyond Jan. 1, then the question needs to be asked about how it can be made sustainable.”
Pierce said the county’s bills wouldn’t be a problem, as three county land sales are near completion. One land sale is near the county fairgrounds. Pierce declined to describe the location of the others because negotiations are ongoing.
With the loan request dropped for now, Mitchell, who didn’t run for re-election, said the new commissioners have full control over the mall’s future.
“The new board will have to make a decision about what they want to do with the mall, and whether that includes getting a loan through the LGC or not will be up to them,” he said.
Contact reporter Josh Bergeron at 704-797-4246.