Salisbury hires contractor for new fire station, finance terms discussed
Published 12:07 am Thursday, May 4, 2023
SALISBURY — The city of Salisbury has found a contractor to build the new Fire Station 3 and have moved forward with a plan on how it will be financed.
On Tuesday night’s city council meeting, William Burgin, architect of the station, advised that KMD Construction, LLC provided the lowest bid for the project at a little over $8 million. The Local Government Commission requires that the city have an installment financing agreement in order to borrow the funds to finance the station. The maximum figure authorized was $10.5 million, but total costs are projected to come in below that.
The council approved the resolution of intent stating that the city has the means to borrow the money. The total contract price is $9.3 million which includes the contractor’s fee, furnishings and additional contingencies.
On April 17, First Tryon Advisors sent out a request for proposals to “local, regional and national banks” according to Managing Director David Cheatwood to help get a loan to pay for a majority of the station. Out of the eight proposals that were received, JP Morgan was the “most aggressive” by presenting three different options. The one that was chosen was for a loan amount of $6.5 million with a 15-year-term at a rate of 3.29 percent. This option provides prepayment flexibility that the city wanted in case interest rates change or Salisbury decides to pay off some of the loan earlier than expected.
The roughly $3 million difference for the rest of the project will come from the city’s fund balance and non-allocated American Rescue Plan Act (ARPA) funds.
Contracts are still being finalized with KMD Construction, LLC. In the next few weeks, the city will draft a capital project ordinance to establish the funds appropriately into the city’s budget. The final resolution for the fire station will be presented to council on June 6.