County will add to loan request
By Steve Herring
Published in News on March 31, 2014 1:46 PM
Wayne County commissioners not only will apply for up to an additional $1 million through North Carolina's Eastern Region, they will consider setting aside some of the funds for county projects.
Earlier this month commissioners applied for, and received approval to borrow the $576,923.08 from the county's Eastern Region Trust Fund to help several municipalities with economic development projects.
Mount Olive will get $100,000 for its airport project; Pikeville $75,000 to refurbish a tank used to store treated wastewater; Fremont $255,244,71 to pay off long-term debt; and Eureka $146,678 for sewer improvements.
Goldsboro asked for $450,000 for its plans to widen Berkeley Boulevard or $475,000 for engineering services for its downtown Streetscape revitalization project.
However, the city's request was not approved.
Commissioners agreed to borrow the initial $576,923.08 for 59 months instead of the full 60 so the county would not need Local Government Commission approval for the loan.
However, the towns will still need that approval. If any of the towns are denied, it would free up money that could go back to the other projects, commissioners said.
The Eastern Region is being dissolved and will be replaced by a privatized Eastern Regional Alliance. The state funded the trust fund when the Eastern Region was first formed. The stipulation is that the money can be used by member counties for economic development projects only.
Commissioners had discussed the possibility that the county could borrow from the trust accounts of other counties if those counties did not use the funds.
Interim Wayne County Manager George Wood initially recommended that the county apply for $500,000 from those other trust funds, but decided to increase the total to $1 million.
The money has to be used for economic development.
"Time is of the essence because it is first-come, first-served," Wood told commissioners last week. "These monies are the monies that other counties had decided not to use. So that is being put into the pot. The difference here is that on the first $576,923.08, for which you have already been approved for, there was a one-time 1-percent fee, and it was a 0 percent interest rate for a period of 59 months. That is because that money was allocated to you as one of the nine counties (in the region).
"This second pot is a little different. The Eastern Region will provide it, but they want a 1 percent upfront fee. Each county who is putting money into the pot wants a 1 percent fee. Those are one-time costs and then an annual interest rate of 25 basis points (0.25 percent.) So it is still an outstanding interest rate."
To help the municipalities that are already struggling financially, Wood recommended that the county not charge any additional fees.
Whatever the county has to pay, depending on what pot of money is used, that is all that it would charge the municipalities, he said.
"For instance, I think Mount Olive was going to get $100,000 and that is out of the $576,923.08," he said. "They would pay a 1 percent fee, which is $1,000, which is it. It is an interest-free loan for 59 months.
"If on the other hand they requested $200,000, so if they got the second $100,000 under this other program, they would have to pay a 2 percent upfront fee. They would pay $2,000 and then they would pay 25 basis points annually for the loan."
If the county decides to keep some of the $1 million for its own use, it would pay a 2 percent fee and 0.25 percent annual interest, he said.
Commissioner Steve Keen said he wanted to see jobs tied to the county's participation.
"That is the purpose of why we are going this additional mile to gain access to this money from other counties that are not going to use it," Commissioner Ray Mayo said.
Keen's motion to approve Wood's recommendation was unanimously approved.
The county received a total request of about $1.7 million from the municipalities, Wood said.
"If we can get this million, we can pretty much take care of everybody's request from our municipalities," he said. "Whatever we come out short, I recommend that you take out of Goldsboro's share. The reason is they are asking for the largest amount. They are asking for $940,000. So if they got cut back $100,000, they would still be getting way more than anyone else."
Commissioner Joe Daughtery asked if the county was limited to lending the money to municipalities or if the county could use it.
Mayo said the county could use the money.
"I would go after it today," Wood said. "Then you could determine how you want to do it at a later date. We are in a rush to get our name in the pot because Ray (Mayo) came back and indicated that it is first-come, first-served. He has been advised to get the request in."
Commissioner John Bell, who is also on the Eastern Region board, said the county does not have to have shovel-ready projects to be eligible to get the money.
"It can be money that we can get and hold it for a while until we come up with a reason to use it," he said.
All the county has to put on the application for the second pot of money is that it will be used for economic development, Mayo said.
Daughtery said that based on previous board discussions there are issues with the county's Genoa sewer lift station.
"It might be that we will need some of these funds to do some improvements there," he said. "So I just hope that we would have some flexibility there so that the county could use that."