NEWBERRY COUNTY COUNCIL
MINUTES
MARCH 16, 2005
The Newberry County Council met on Wednesday, March 16, 2005, at 7:30 p.m. for a regular meeting.
Present were:
Mike Hawkins, Chairman
William D. Waldrop, Vice-Chairman
John E. Caldwell, Councilman
Henry B. Summer, Councilman
John David Dawkins, Councilman
Andy Morris, Councilman
Edgar Baker, Councilman
Leonard
B. Sossamon, Jr.,
Gary
T. Pope,
Susan C. Fellers, Clerk to Council
Representing the news media were:
Newberry Observer – Cindy Pitts
WKDK – Heather Hawkins
Whitmire News – Cassie Fowler
As required by law, notice of the meeting was duly advertised.
Mr. Hawkins called the meeting to order and determined a quorum to be present.
Mr. Baker had the invocation followed by the Pledge of Allegiance.
Mr. Caldwell moved to adopt the consent agenda; second by Mr. Baker. Vote was unanimous.
Mr. Hawkins requested the addition of three zoning ordinances (agenda Items 5.1 a, b and c) and personnel matters to the Executive Session (agenda item 6.1).
There being no further additions or deletions, Mr. Caldwell moved to adopt the agenda as amended; second by Mr. Dawkins. Vote was unanimous.
Lynn Beasley asked for Council’s consideration and approval for the hospital to refinance debt that was originally issued in 1999.
Brent Robertson with Merchant Capital, the finance banker underwriter working on the project, reviewed the following options which are available to the hospital:
1. An interest rate swap wherein the existing variable debt is swapped all or some portion to a fixed rate mode.
2. Remarketing the bonds.
3. Executing a structure similar to that being utilized by the County on the refinancing of the J.F. Hawkins’ obligations.
Mr. Robertson identified option 3 as the best and requested that Council consider the following:
1. A mortgage security interest being granted in the land and the improvements thereon.
2. A debt service reserve fund replenishment agreement by the County similar to that being used on J.F. Hawkins.
3. Preservation of the existing final maturity on the bonds in 2029, but with a note that to the extent that debt service payments could be lowered sufficiently or the interest rate on the bonds could be lowered sufficiently, we would try to work to shorten the amortization period. That would have the effect of increasing the debt service, which becomes a budgeting question.
The benefits of option 3 are:
1. Fixed cost of capital in what is still considered to be a low rate environment.
2. One of the options would be remarketing the debt of the current bond documents into a fixed rate mode but there is a 3% conversion premium that is charged by the remarketing agent for their fees and expenses, which would be about $300,000. We would be at least 1/3 cheaper than that.
3. Fixed rate debt provides certainty for budgeting.
4. Preserves future refinancing flexibilities if rates ever fall below current levels. The refinancing of variable rate debt into a fixed rate mode through a new bond offering is considered to be a current refunding under federal tax law. In the future if rates did drop again, you would have the option of refinancing under an advanced refunding structure. There is future refinancing flexibility if rates drop again.
5. Eliminating the LOC renewal rates. The LOC expired in December 2004 and was renewed for another year. There are renewal risks. Wachovia has the option, but not the obligation, of renewing. If they don’t want to renew, you run the risk of someone charging you more. With a fixed rate transaction you eliminate the need for a letter of credit. You pay a bond insurance premium on the front end but it is a one time fee. The balloon maturity on the current debt is December 2029 but the LOC with Wachovia has mandatory sinking fund installments or mandatory annual principal payments. Wachovia, if they renew, has the option of renegotiating the amortization schedule or if you have another LOC, they might want to see a new amortization schedule. There are no guarantees they won’t try to have more principal on the front end which creates cash flow problems. There would be less interest costs because you are paying off the debt more quickly but can you afford the debt.
6. The contingent County support might provide structure.
The drawbacks of option 3 are:
1. It increases the level of contingent long term liabilities of the County.
2. It creates a security interest in the land and improvements (a mortgage on the facilities).
The 2004 audit estimates the depreciated value of the hospital at approximately $33,000,000 with all medical equipment. Without medical equipment, the depreciated value is approximately $20,500,000.
Mr. Dawkins moved to go into a brief Executive Session to discuss two legal matters concerning the hospital; second by Mr. Morris. Vote was unanimous.
[EXECUTIVE SESSION 8:23 P.M. –
8:31 P.M.]
Mr. Morris moved to return to regular session; second by Mr. Baker. Vote was unanimous.
Mr. Hawkins stated some questions were cleared up about the County’s obligation should we take this on.
Mr. Morris moved to defer action until April 6 and in the interim we set up a work session with hospital administration; second by Mr. Waldrop. Vote was unanimous.
This was a Homeland Security Grant approved and accepted last year. Part of the grant will upgrade the radios for the Sheriff’s Office, fire and rescue in the Whitmire area by adding a repeater at a cost of $67,578.96, which was a competitive bid won by Kinard Control Systems of Newberry, South Carolina. It requires no match and is not general fund money. It is a grant provided from the United States Department of Homeland Defense.
Mr. Morris moved to accept the bid; second by Mr. Baker. Vote was unanimous.
This is a
continuation of the 2004-2005 Homeland Security Grant in the amount of
$113,521. There is no County match and
it is not general fund money. This is
grant money provided through the State of
Mr. Morris moved to accept; second by Mr. Dawkins. Vote was unanimous.
This is money
allocated by the 2005-2006 Department of Homeland Security program in the
amount of $33,680. No match, and it is
Mr. Dawkins moved to accept; second by Mr. Caldwell.
Mr. Hawkins asked if this involved personnel. Sheriff Foster stated personnel under this is prohibited. We are buying equipment and services for this money.
There being no further discussion, Mr. Hawkins called for the question. Vote was unanimous.
A public
hearing is required by law on the Local Law Enforcement Block Grant. This grant is provided by the Department of
Justice to all law enforcement agencies in the
i.
Public
Hearing
Mr. Caldwell moved that this be the public hearing. Vote was unanimous.
There being no comments from the public, Mr. Hawkins declared the public hearing closed.
i.
Acceptance
of Grant and Purpose
Mr. Waldrop moved to accept the grant; second by Mr. Morris. Vote was unanimous.
ii. Appointment of Dan Kingston as the “Responsible Official” to apply for and manage the grant.
Mr. Morris moved to appoint Dan Kingston; second by Mr. Baker. Vote was unanimous.
The County
Purchasing Ordinance requires the Sheriff to come back before Council if
purchases are over a certain amount of money.
Not only does the County approve the money to be spent, a budget is
turned in, and it is approved by the State Law Enforcement Division and then
the Department of Homeland Security. Because
of the time constraints and in order to cut down on some of the redundancy on
these grants, Sheriff Foster asked to be allowed to go through the
Mr. Morris
moved that we cooperate and move as quickly as possible subject to our
Mr. Baker moved to be excused due to a personal conflict.
[Mr. Baker excused from Council Chambers]
Mr. Scott advised that when this project was first presented, the County had no need to put funds into the project, but because the use of the building changed from educational to institutional the costs went up.
The project currently is serving over 250 people in the Whitmire community with the building as it is now. Seniors are served in the area, which the Council on Aging could not serve because they didn’t have the slots available. Meals are served both on and off the property. The community is served with a soup kitchen, food pantry, clothes closet, an after school program, and a summer camp. All of these things have been done with limited funds. If additional funds are not received to bring the building up to code, a lot of the programs would have to be closed down.
If funds are
received, drug and teen pregnancy counseling could be provided, together with a
daycare program that would accept ABC vouchers.
Services are not just open to the Whitmire community but to all of
Mr. Morris stated we entered into the agreement based on the original cost estimates and asked if they could scale back what they are trying to accomplish now to use the money already available and apply for more money over the next several years. Mr. Scott said if the project is scaled back, it scales back the services that we have told the Department of Commerce we would offer, and if we don’t offer the services, we have to go back to the Department of Commerce.
John Huffman with Central Midlands Council of Governments stated the budget for construction and rehab of the project was just shy of $318,000. The project as submitted by the low bidder, W.E. Baker & Son, after it was value engineered down, came to $630,000. That excludes the cost of approximately $50,000 to remove asbestos and to address lead based paint in the building. We just recently learned it may cost another $20,000 to deal with mold that may exist in the roof according to David Ashworth, the Building Inspector. If you have $630,000 for the base work as would be needed to deal with what was stated in the grant application, $50,000 for asbestos removal and another $20,000 for mold that is $700,000 compared to a project budget of $317,000. You can’t come back next year and apply for more money. The County has already requested an additional $128,000 to bring the total allowable grant up to $500,000 less architectural and engineering fees. The grant has to be used for what was described in the application.
Mr. Morris asked
why the project couldn’t be staged so Council could put in money next fiscal
year to get it done. Mr. Huffman stated
there was a 2 year grant period on the projects. The grant was awarded in December 2003, and
we are pushing well into the second calendar year and it would be difficult to
prepare the building for the work. In
order for W.E. Baker & Son to get into the building, all of the asbestos,
mold and lead paint work will have to be done first. That exact cost has not yet been
determined. In order to finish this
within the original 2 year grant period that is going to be difficult, and that
will begin to negatively impact your ability to obtain other grant funds
through the Office of Grants in the Department of Commerce. You always have the option of adding more
funds to a project in successive fiscal years, but you do face this 2 year
project limitation. Mr. Huffman was
recently informed by the Department of Commerce that in the wake of a new grant
application request submitted by
Lillie Mae Graham and Reverend Jeter spoke in support of the project and requested that Council consider helping with this project.
Mr. Caldwell suggested readdressing this issue to see what could be done to help them.
Mr. Morris moved to direct administration to work with this group and come back at the April 6 meeting and see if the cost of this project cannot be spread out over a number of years rather than being looked at as one lump sum; second by Mr. Dawkins.
Mr. Hawkins asked how the use was changed from educational to institutional. Mr. Scott said when the architect looked at the project and talked with the Fire Marshall, that is the way it came back, but he did not know what changed to make it institutional.
Mr. Huffman stated when the project was in the process of being finalized for submission to the State, Mr. Scott, Mr. Ashworth and a number of people met and determined that in order to conduct a building code compliance for the facility so the construction would meet code, Mr. Ashworth and others said it was going to be an institutional use. It was a requirement of the 2000 building codes. The State Department of Commerce doesn’t favor the spreading of these projects over a number of years.
Robin Cooley with Central Midlands Council of Governments stated they typically don’t phase in a building. They will not give repeated grants for the same building over and over again.
Mr. Hawkins asked how we were so far off in our estimates of what would be needed. Mr. Huffman stated the initial estimates were not done by an architectural firm but by a number of subcontractors. The bidding was put out at the end of 2004 after a year of sharp rises in material prices. When you put all of those things together that had to be done to implement the code compliance analysis done by the architectural firm, the low bid came back even after it had been value engineered down to $630,000.
Mr. Hawkins asked if the architect was on board when we put out the bid. Mr. Huffman stated they were and in fact prepared the bid specs.
Mr. Hawkins asked if the architect left out the asbestos removal and the mold. Mr. Huffman advised as grant administrator they were informed in December before the bids were put out that there was fine print in the new American Institute of Architectural Contract that architects today for liability purposes don’t deal with asbestos or lead based paint. They want the building cleaned of that before the contractor comes into the building. This was literally sprung on us in December because Mr. Huffman didn’t read every single line of the standard contract.
Mr. Dawkins asked if in the plans, it was set out for certain rooms to be the daycare. Mr. Scott stated everything has been designed and all rooms assigned a purpose. The plans have been submitted to the Fire Marshal’s office and approved.
Mr. Sossamon advised that based on his conversation with Ms. Cooley and Mr. Huffman the Department of Commerce probably will reject the offer by the County to phase the project. They don’t like to do that. One attempt has been to see if we can do less of the entire building by closing off 4 or 5 rooms or whatever and bring it down within the confines of the dollar amount we have allocated. The Department of Commerce has said no and to do the project as presented. They really don’t care that we are running out of money. The issue was to take the $371,753, less $25,000 for the COG to administer the program and $29,000 for the architect which gets to the $317,753 figure that was left for actual construction. After value engineering the project was brought down from over $700,000 to $630,000. We found out in December that the architect washed their hands of any lead based paint or asbestos type problems, anything that was a hazardous material. At that point in time we secured professionals, one of which was Rufus Rogers of Newberry County School System, who volunteered his time and energy at no cost to us, to go out and pull samples. Those samples were pulled and submitted, and the architect is still standing over in the corner watching us do this. We come back and have the analysis, and at this time it looks like the asbestos removal will be somewhere around $50,000 and probably another $20,000 or so because the roof which leaks is wet and has to be removed; otherwise we have mold. We can’t allow it to continue to happen because it is going to be a County facility. Even though it was reduced to $630,000, all we had to use was $371,000. Right now we know it would take another $200,000 to $250,000 to make it useful. If you go back and try to phase it, you alter the entire concept of the program as it is set out by the Department of Commerce. The Department of Commerce is administering the program on behalf of the United States Government being the Department of Housing and Urban Development, and they have guidelines. That whole process is what has protracted this and turns it into a two year program. If we didn’t have to follow all of those guidelines, we could probably do it in a lot less time, but you can’t because of the rules and regulations established by the federal government which are adversely enhanced to some degree by the Department of Commerce in their interpretation. Mr. Sossamon didn’t think the Department of Commerce would let us phase it, but to do it as originally submitted or not do it at all. If we don’t do it within the guidelines as was submitted, it is probably going to be held against us for future grant applications. We either do it as submitted or else we forget about it.
If we had obtained all the numbers originally and had a professional architect look at it, probably we would have had to redefine the scope of the project and asked for $500,000 versus $371,000. We would still be short, but not as short.
Mr. Morris asked if we go forward, when is the money due from the County for this project. Mr. Sossamon advised to comply with the guidelines established by the Department of Commerce, it would have to be finished by December 31, 2005. Our money as well as Commerce’s money would have to be spent in that time frame. We could take some money out of this fiscal year’s budget and some out of the next fiscal year’s budget.
Mr. Morris withdrew his motion since the Administrator answered his question.
Mr. Hawkins stated Council would look at this during the budget meeting on Monday night.
Mr. Baker returned to Council Chambers.
[BREAK
9:20 P.M. – 9:25 P.M.]
Nancy Owen, Auditor, addressed Council regarding reassessment notices and estimates of property taxes. She presented and explained a formula for computing property taxes based on a “guesstimate.”
Mr. Dawkins expressed concern about not being able to obtain answers and documentation from the Assessor’s Office because the Assessor went on 2 weeks annual leave immediately after sending out reassessment notices. He also felt the assessment was unfair and flawed, and he wants to see how the Assessor came up with the plan. Mr. Dawkins also felt the deadline for appeal should be extended for 2 weeks since the Assessor’s Office has been unable to furnish information to the public for 2 weeks.
John E. Caldwell
responded to the article appearing in today’s Newberry Observer about
the Councilmen who are attending the National Association of Counties
conference in
Mr. Morris requested in regard to the article in The Newberry Observer about the NACo conference in Hawaii that a correction be printed indicating that he was NOT driving across country and he was NOT taking time off from his full time job to attend the conference because he is retired.
Mr. Morris handed out a list of roads to be paved which was compiled by Ron Lilly and Gerald Shealy which was passed out at the CTC meeting yesterday. It will be acted on next month.
No appointments.
5.1 Zoning
Amendments:
a. An Ordinance to amend the Official Zoning Map established
pursuant to Zoning Ordinance No. 12-24-01 so as to rezone TMS parcel No. 288-17
from Rural (R-2) to General Commercial (GC).
Mr. Waldrop moved for first reading; second by Mr. Baker. Vote was unanimous.
b. An Ordinance to amend the Official Zoning Map established
pursuant to Zoning Ordinance No. 12-24-01 so as to rezone TMS Parcel No. 399-28
from Single Family Residential (RS-1) to Single Family Residential (RS-3).
Mr. Caldwell moved for first reading; second by Mr. Morris. Vote was unanimous.
c. An Ordinance to amend the Official Zoning Map established
pursuant to Zoning Ordinance No. 12-24-01 so as to rezone TMS Parcel Nos.
399-130 and 399-57 from Rural (R-2) to General Commercial (GC).
Mr. Hawkins stated this should only be
for Parcel No. 399-130 located on
Mr. Dawkins moved to give first reading to an ordinance to rezone Parcel No. 399-130; second by Mr. Baker. Vote was unanimous.
Mr. Caldwell moved to go into Executive Session to discuss several economic development issues and two personnel matters. Vote was unanimous.
[EXECUTIVE SESSION 9:55 P.M. – 11:05 P.M.]
Mr. Morris moved to return to regular session; second by Mr. Summer. Vote was unanimous.
6.1
Personnel.
Mr. Hawkins advised that several economic development issues were discussed but there was nothing to report.
Several personnel matters were discussed and there is nothing to report.
Mr. Hawkins requested permission to add an item to the agenda since we told the City we would make a decision as to whether we would pay a lump sum or spread out the county’s contribution over the term of the lease for the aerial fire truck.
Mr. Morris moved to add to agenda; second by Mr. Waldrop. Vote was unanimous.
Aerial Fire Truck.
Mr. Morris moved to pay for the aerial fire truck over the 10 year period that the City will be utilizing; second by Mr. Baker. Vote was unanimous.
April 20, 2005, 7:30 p.m.
Mr. Hawkins advised of a conflict on March 28th and requested that meeting be moved to March 29th. It was the consensus of Council to move the meeting to March 29th.
Council agreed to schedule the public meeting for the new library on April 13.
Consensus of Council was to schedule work session with NCMH during one of the budget workshops.
No comments.
Mr. Caldwell requested a letter of support from Council for his application to be appointed to the NACo Board.
Mr. Morris moved to support Mr. Caldwell in his application; second by Mr. Summer. Vote was unanimous.
Mr. Dawkins moved to adjourn. Vote was unanimous.
There being no further business, the meeting adjourned at 11:16 p.m.
NEWBERRY COUNTY COUNCIL
________________________________________
Mike Hawkins, Chairman
_________________________________________
Susan C. Fellers, Clerk to Council