The Local Government Commission has decided to delay examining a Rowan County request for financing the West End Plaza purchase.
Agency officials contacted Rowan County Manager Gary Page on Wednesday to inform him they were delaying the West End Plaza financing application scheduled to come up Tuesday in Raleigh.
According to an email Page sent to commissioners, Tim Romocki, LGC director of debt management, told Page “an assessment of public support for the proposed financing was part of the LGC staff’s due diligence and recommendation to the LGC.”
Page said commission’s staff wants to review minutes from Monday’s second public hearing regarding financing for the mall as part of their evaluation.
“(Romocki) stated that he was going to notify the La Resistance movement of the LGC’s decision to delay action,” Page said.
When Page submitted the proposed budget and tax increase recommendation to commissioners May 19, the county manager said it was contingent on an approved $3.9 million loan to reimburse the county for the purchase of the mall property.
“Now that the loan approval is in question and may not be determined until after June 30, the budget picture is unclear,” Page said. “Since the budget has been officially submitted, there will be no revisions made prior to Monday’s meeting by staff or myself.”
On Monday, commissioners will hold a public hearing on the budget. “Any revisions or changes to the proposed budget are now in their hands,” Page said.
Commissioner Jon Barber said the issue could be a “budget-buster.”
“In his proposed budget, the county manager recommended a 3.75 cent tax increase, of which half a cent would cover the debt financing of the mall,” Barber said. “(Page) and staff had already assumed the LGC would approve it and the money would be in our bank account at this point before June 30.”
Barber said the tax increase would end up being far short of what is required to maintain county service levels as they are today.
The tax increase could go to six to eight cents to keep the county’s fund balance from dropping to 8 percent, Barber said.
“That is when you start getting all the nasty letters from the LGC,” Barber said. “As the only commissioner to oppose the purchase of the mall, I have been concerned from the beginning that there was no well-thought-out plan before the purchase of the mall.”
Craig Pierce, the board’s vice chairman, said the LGC’s decision “is not going to affect the budget one way or another.”
“We’re not borrowing money for current expense,” Pierce said. “We all agreed we would turn around and agree to borrow. The only reason we haven’t done it sooner is because we were waiting on the schools.”
Every time the board sends an application, it costs $100,000, Pierce said.
“We would have done it six months ago, but we waited because of the schools,” Pierce said.
The county borrows money for every capital improvement item, Pierce said.
“That’s not unusual,” Pierce said. “We have these people upset about the purchase of the Plaza and they are making a big issue. The LGC is wanting to take time to do due diligence, find out the facts, look at the situation and look at the application.”
The $3.425 million that commissioners are asking to borrow is an unusually small amount, Pierce said. “The mall is on the tax books for $6 million. We bought it for $3.425 million,” he said. “You’re buying it for 60 percent of the tax value.”
Although Pierce could not speak for all commissioners, he did say board members intend to go forward with progress at West End Plaza.
“We will go forward with moving in the board of elections and veteran services office,” Pierce said. “It might change depending on what the LGC does. It would be expedient for them to approve it so we can go ahead and have money for the renovations.”