Council may cover half cost of building for parks
SALEM — How about splitting the cost?
That’s the latest approach by city council for financing the $95,000 agreed-upon purchase price of an office building sought by the parks department for its new headquarters.
Council held first reading on the proposal to use $47,500 from the council contingency fund towards the purchase during a special meeting Tuesday night, with plans to hold another special meeting at 6 p.m. Thursday in council chambers at city hall for the second reading. The third and final reading for possible passage will be held at council’s next regular session, which is currently scheduled for 7 p.m. next Wednesday, Nov. 7, but Councilwoman Cyndi Baronzzi Dickey said there may be a motion to move that meeting to Monday.
A deadline for finalizing the city’s purchase of the former doctor’s office at 2222 Oak St. is set for Nov. 8, with an offer by another buyer pending if the city’s purchase falls through.
The proposal is for the parks department to borrow their half, $47,500, through a bond which has its repayment stretched over 20 years, in five-year renewable increments.
During the special meeting, council went ahead and unanimously approved an ordinance for the issuance and sale of bonds not to exceed $70,000 of notes, meaning the paperwork will be in place for the parks department to cover the entire cost of the purchase by the deadline (when added with a proposed $25,000 down payment from current park funds), just in case council nixes the idea of contributing to the cost. The borrowed funds will be repaid by the parks department.
The amount the parks department ultimately will have to borrow depends completely on whether council agrees or not to use a portion of the council continency fund to help cover the purchase price for the building, which will be city-owned. If council goes forward with the ordinance to pay half, then the parks commission which oversees the parks could decide to borrow their half or they would have the option of still using current park funds to pay a $25,000 down payment and borrowing less. Or there’s the option of just borrowing their half and freeing up that $25,000 for anything that may be needed for the building, which has been described as move-in ready.
Councilman Andrew Null suggested splitting the cost during the Committee of the Whole meeting which preceded the special council meeting, where there was much discussion and disagreement over how or whether to proceed at all. All seven agreed that the purchase met the requirements for use of the fund, but Null’s motion to pay half the cost with the council contingency fund only passed with a 4-3 vote. Councilmen Geoff Goll, Steve Faber and Ron Zellers all voted against it.
“I guess my concern is spending $95,000 for two-and-a-half employees of the city just boggles my mind,” Goll said before Null suggested matching the parks department dollar for dollar, adding he received seven phone calls from people asking why council was considering the purchase.
He said he couldn’t support spending three-quarters of the council contingency fund for two-and-a-half employees, plus he said that’s taxpayer funds, but Dickey said the city will be spending $95,000 one way or another. It was also pointed out that if the parks pays the whole cost, they’ll be paying interest, and that’s also all taxpayer money. Goll said he thought the contingency fund should be used for economic development purposes, such as proposals that could create jobs.
Mayor John Berlin answered Goll’s previous comment, saying it boggles his mind that the city has paid $255,000 to the Memorial Building over 20 years for offices for two-and-a-half people, with no ownership or stake in the building. He said buying the office building would be just use of the council contingency funds.
Faber, who previously served as parks director before a mutually agreed-upon departure late last year, serves on the parks committee of city council, along with Councilman Ron Zellers and Dickey. He said the committee brought the parks’ plan to council for the parks commission to borrow money for the purchase and he saw no reason to change the original plan. Zellers agreed with sticking to the original plan.
“My main question is why pay interest on a loan if the money is there?” Councilman Sal Salvino said.
During the special meeting when Dickey asked for a suspension of council rules to present the proposed ordinance for paying half the cost of the purchase, the motion passed with Goll and Faber voting no. When she attempted to have statutory rules suspended, so council could have all three readings with the emergency clause for passage right then and there, it failed 5-2, with Goll and Faber again voting no. Suspending statutory rules requires six yes votes, which is why they could only do first reading.
The parks commission first raised the issue of moving out of the Memorial Building late last year after the two entities separated. Nothing was done with the idea until recently, when the parks commission reached a purchase agreement with the seller of the office on Oak Street and asked council for approval to borrow the funds for the purchase. Questions were raised about the necessity and the funding and council gave the go-ahead for the purchase, then Dickey proposed that council pay for the purchase with the contingency funds so the parks wouldn’t have the debt, especially since the building will be owned by the city either way and other departments are provided office space by the city. She didn’t think it was fair for the parks department to shoulder the cost. At no time did the parks commission ask council to do that, but they didn’t seem to have a problem with the idea.
Dickey’s idea of using council contingency funds to pay the entire cost was tabled at the time until the next council meeting, amid questions on how the fund is to be used, then a Committee of the Whole meeting was set for Tuesday with a council meeting to follow regarding the topic. Council will need at least four of the seven members present to have a quorum for the special meeting on Thursday.