City gets OK to borrow for projects
By Ethan Smith
Published in News on June 7, 2015 1:50 AM
The future of two multi-million dollar projects no longer hangs in the balance after the city received the go-ahead for financing from the North Carolina Local Government Commission.
City Manager Scott Stevens traveled to Raleigh to meet with the LGC on Tuesday to receive the organization's approval to borrow money for the construction of a new W.A. Foster Center and for renovation of the Goldsboro Country Club.
On May 18, the city received a letter from the LGC warning that the city's fund balance had fallen to unacceptably low levels at the end of the previous fiscal year.
The city responded to the letter on the same day, assuring the commission the fund balance would be greatly improved by the end of this fiscal year.
The reason the city's fund balance had dipped so low -- to $645,905 -- was a $2.7 million settlement in June 2014 to Dwayne Dail for a wrongful conviction case. Dail spent the better part of two decades behind bars for a crime for which he was later exonerated.
The total settlement paid to Dail was $7.5 million, with the city paying $2.7 million and the city's insurance company paying $4.5 million.
At first, the commission approved paying the settlement out of the city's fund balance. Upon further review, officials decided to warn the city that this action had caused the fund balance to dip too low, and that it would need to be replenished by the end of the 2014-15 fiscal year.
"They approved our borrowing," Stevens said. "That was five minutes of our time there. They had other visitors so some other folks spoke. But we presented and they just had a few questions, not much of us, and then the commission voted, I believe, unanimously for allowing us to borrow the money, which is what we expected. It was just a matter of going through the process of getting there."
This means that since state approval for borrowing the money has been secured, whether or not to borrow the money will come back before Goldsboro City Council on June 15 -- the council's next meeting.
"We have one bank bid on that, so (Finance Director) Kaye (Scott) is working through the details on that with that bank, so I expect it'll go as planned. If the council approves it June 15, then we'll be set up to close the loan (for the properties) the same week because we'll want to close before the end of this fiscal year."
Stevens said the LGC was also notified of the city's recently adopted budget, which allow for the financing of the additional debt that will be taken on by borrowing the money for the two projects.
The city's estimated operating surplus for fiscal year 2014-15 is also expected to increase from $700,000 to approximately $1.3 million, which is nearly double the original projection.
Stevens said T.A. Loving is set to begin construction on W.A. Foster at any time, but is awaiting city approval and financing before moving forward. He said construction will most likely begin shortly after July 1, and a groundbreaking event will be held.
The city hopes to move forward with renovations to the Goldsboro Country Club during the same time frame. The project is expected to take three to four months once the renovation process begins, setting the opening date for the country club at sometime in October, Stevens said.