City will borrow funds for new fire station

By: Jim Mcnally | Statesville Record & Landmark
Published: February 03, 2010

At its Monday night regular meeting, the Statesville City Council voted to borrow the money the city will need to build its new fire station later this year.

But it was not a unanimous vote.

Councilman C.O. "Jap" Johnson was adamant that the city should pay for the nearly $2 million project with the cash it has in the bank.

"I just don't feel good about borrowing when we have the money in the general fund," Johnson said.

But Finance Director Lisa Salmon said the construction of the fire station qualifies for a special kind of funding — called a Recovery Zone Economic Development Bond (RZ-EDB) — that other city projects do not.

When Johnson asked specifically what the city might use cash to pay for, Salmon said the main projects on the drawing board are those related to the ambitious Downtown & N.C. Highway 115 Streetscape/Land Use Master Plan.

That plan has an total price tag of about $28.2 million but the downtown portion of it — mostly along Broad Street — is about $5 million.

"And I'm against the downtown project. I don't think that $5 million is worthwhile to spend," said Johnson.
He later added, "I am 100 percent for the fire station, but I'm against borrowing for it."

The RZ-EDB was created as part of the Obama Administration's stimulus package — the American Recovery and Reinvestment Act — and was designed to be used to finance certain types of government projects.

Salmon explained that the bonds allow for the city to receive refunds on 45 percent of the interest payments made on the loan, which the council voted to secure from Bank of America.

The finance plan the council approved Monday is to borrow $1,947,000 at an interest rate of 5.03 percent.
The 10-year interest on the loan will amount to just under $539,000 and the RZ-EDB will allow the city to be reimbursed a little more than $243,000 of that.

City leaders hope to have the new fire station — located on Martin Lane in the northeast corner of the city — to be up and running by spring 2011.

Three votes on different aspects of the fire station project all passed by 6-1 counts Monday, with Johnson casting the lone dissenting vote in each of them. Councilman John Gregory was absent.

n Also Monday, the council voted to extend a $107,170 tax incentive grant to an unnamed furniture company that plans to expand its operations.

Mike Smith of the Greater Statesville Development Corporation said the company plans to add 100 jobs over the next five years.