Polk County Commissioners disagreed on how to pay for the purchase and renovations of a building for the high school’s early college with the majority saying it is best to borrow $800,000.
Commissioners met Tuesday, April 22 and held a public hearing on a financing agreement for the new early college building, which is currently being renovated near the high school on Hwy. 108.
Commissioners approved a resolution on April 7 calling for a public hearing on borrowing the money, which includes $300,000 for the building purchase and $500,000 for the renovation and addition.
Polk County Finance Director Sandra Hughes said the N.C. Local Government Commission (LGC), which has to approve the county borrowing the money, favors hearing what residents say about counties financing projects. There were no citizen comments during the public hearing.
Commissioner Ray Gasperson was the sole vote against approving a new project budget ordinance adding $197,000 to the project from the school board.
Gasperson tried to amend the motion to take the $800,000 from fund balance saying that although he strongly supports the school’s early college program and its expansion, he thinks the county will be making a mistake to finance the funding.
“Rather, we should do the same as was done in 2007 when $455,354 was pulled from the fund balance to pay for the Tryon Elementary School addition and in 2008 when $750,000 was pulled from the fund balance for the Sunny View School addition,” Gasperson said. “If the county borrows the money, this will likely add an additional taxpayer cost of approximately $114,000 to over $130,000 in interest payments. In addition, there will be approximately $10,000 in closing costs and a $1,250 application fee to the LGC.  Also, there will likely be a payment included in next year’s county budget of approximately $70,000.”
Gasperson said his primary reason for wanting to pay for the early college out of fund balance is there is no compelling reason to borrow the money. He said he has always supported reducing the county’s debt and has voted to pay off a total of $4,416,418 of the county’s debt, which he has been thanked by many citizens for doing so.
Commissioner Tom Pack said Gasperson was being a hypocrite in not wanting to borrow money when he voted to borrow money for the department of social service building (DSS).
“I think it’s sort of being a hypocrite when commissioner Gasperson voted to borrow $2 million for the DSS building,” Pack said.
Commissioner Michael Gage asked Hughes if it would make her nervous to take the money from fund balance.
Hughes said taking money from fund balance depends on the economy and on commissioners’ plans for future buildings. She said it depends on future thoughts commissioners may have for a project the county couldn’t borrow money for, such as a waterline. In borrowing money for the early college building, the county has an asset for collateral so there’s no problem borrowing money, Hughes said.
Gasperson said one of the reasons the county borrowed money for the DSS building is that the county gets reimbursement on a portion of the interest through state and federal funding.
Gage asked if there is a penalty for paying off the loan early on the early college.
Hughes said there likely will be a penalty for paying off the loan early, but the county has asked in loan requests for there not to be.
“If you go around the state and talk to different commissioners and school boards they are always fighting,” Gage said, “so we’re very fortunate here in Polk County. I think we should definitely do the loan to make sure we have capital for the future. That way the money is there and we’re not depleting our fund balance.”
Construction on the 5,000 square foot addition to the early college building has begun with hopes of the renovations to be completed for students to attend classes there at the beginning of the 2014-2015 school year.
Hughes said the county has gone out for bank bids on the loan and has begun the application to the LGC.