Norwood seeks loan to repay cost of 2 properties
Published 3:46 pm Thursday, August 9, 2018
The town of Norwood wants to secure a loan for $849,000 to replenish the town’s coffers for the purchase and renovation of a new Town Hall and the former Center Rural VFD site.
Commissioners debated two bids for the loan at Monday night’s Town Council meeting. Norwood paid $200,000 for the new Town Hall and followed with another $200,000 in renovations. The town also purchased the former fire station that housed Center Rural at a cost of $449,000. Proceeds used came from the town’s General Fund.
“Both properties were purchased with reimbursement resolutions,” Town Administrator John Mullis said. “The town would have originally financed both properties because of their lengthy expected useful life and service to the town. Instead, the town opted to use savings as our audits were being completed.”
Plans call for the town to obtain the loan to offset the capital costs and have available for an emergency expense.
“Ideally, the annual receipt of property taxes would pay for the annual ownership costs so the cash flow of the town is better utilized,” Mullis said. “Reserve savings should always be held in high regard so the town has the ability to respond to unexpected events such as storms or catastrophic events. Municipalities cannot borrow quickly in those cases and federal dollars are often delayed.”
Mullis presented town leaders with two loan finance bids.
Home Trust, based in Asheville and providing the loan for the new Center Rural Volunteer Fire Department, offered a 15-year loan at a 4.39 percent fixed rate and a 20-year loan at 3.90 percent, the first 10 years fixed and then an interest rate review based on the 10-year Treasury bill rate for the remainder of the term.
Uwharrie Bank, a local community bank, offered a 15-year term at 5.5 percent fixed and 5.75 percent fixed for 20 years.
The loan must first be approved by the Local Government Commission.
In an effort to keep the loan local, Commissioner Robbie Cohen made a motion, unanimously accepted, to approach Uwharrie about providing a 10-year fixed rate at 4.75 percent. On Tuesday, Mullis contacted Uwharrie about the request. The request will next go before a loan committee with the bank.
In another unanimous decision, town commissioners passed a resolution to support asking the state legislature to pay $311,000 for the expense of a 500-foot road for the egress and ingress of the newly constructed Center Rural Volunteer Fire Department.
In the state’s 2018-19 budget, $250,000 was appropriated toward the new fire department.
The resolution stated the costs of the road will divert road repair proceeds from the town’s Powell Bill funds.
In a turn of confusion, the board realized it had previously voted in May to remove a fencing contract, but instead voted to keep it intact and a part of the upgrades associated with the road behind the new fire department. Costs of the fencing will be between $53,250 and $58,850, based on a pair of estimates.
Town commissioners also approved the purchase of three new vehicles, which have been appropriated in this year’s budget.
A newly equipped Ford Explorer, at a price of $45,900, has been ordered for the police department.
Norwood is also buying a service pickup truck with a super cab not to exceed $56,000. Maintenance is also getting a new dump truck at a cost not to exceed $56,000.
In new business, commissioners approved a budget amendment to accept a $50,000 grant for the parks and recreation department.
Contact Ritchie Starnes at 704-754-5076 or firstname.lastname@example.org.