Why commit county taxpayers to a mortgage?
Published 6:01 pm Friday, October 27, 2017
To the Editor:
After squandering millions of taxpayer dollars on an ill-chosen collection of political plumbs consisting of crony-ridden grants, commercial real estate speculations, industrial parks, rent-a-jail fantasies and an ill-fated $20 million hospital remodeling; Beaufort County’s Board of Commissioners has suddenly awakened to realize that they have neglected the maintenance and repair of county property for the better part of the last decade.
For years, the commissioners avoided establishing a facilities-maintenance-budget for evaluating and funding the three–to–five-year prospects for the upkeep of county property. This refusal to adequately anticipate and budget for required repairs has allowed the commissioners to use the excess monies generated by inflated tax rates to fund an array of pet projects and vote garnering spending. Basically, the county board has used the entire general fund of the county as a slush fund to prioritize the wish lists of favored political constituencies.
Given that the commissioners have now depleted $6 million from the county’s general funds and raised fees and taxes by $3 million over the last two years, it now seems that the commissioners believe the only way that money can be found to catch up on the long-postponed maintenance of county facilities is to borrow $3 million at roughly 4.0 percent from local banks by means of a loan which is basically structured as a 10-year mortgage collateralized by county property.
There is a better way.
The 2011 sale of the county hospital to Vidant Health brought a $10 million cash payment for the retirement of the debt incurred during the hospital’s remodeling in 2010 and $6 million escrowed as a contingency reserve fund, which was to protect Vidant Health from any trailing liabilities arising from potential mismanagement of the hospital during its final years under Beaufort County’s ownership. This reserve has now been reduced to $4.2 million and is principally held in the form of treasury securities. These investments are earning a return of less than 1 percent per year, and are scheduled for release within the next few months.
Why would the commissioners commit county taxpayers to a $3 million mortgage at 4 percent when we are earning a minimal rate of return on funds that are readily available for withdrawal from the contingency reserve? They shouldn’t. The funds should be taken from the reserve and used to pay for the required maintenance. By borrowing, rather than spending the money we have on-hand, the commissioners are again failing to use the county’s resources in the most efficient manner possible.
In short, by avoiding the costs of borrowing, we can accomplish more by way of repairs.
As a further step in raising cash and bringing dead assets back to useful life, the Chocowinity Industrial Park should be put up for immediate “fire sale.” By liquidating what might be the single silliest idea of the last 25 years, we will generate much-needed cash, put the land into the possession of job creating business developers and return the property to the tax rolls.