Polk County commissioners disagree on whether the county should pay off the loan for the senior center land early.
The board met Feb. 6 and tabled a decision to pay off the loan after some commissioners said the county should instead look into using fund balance money to connect water lines to Polk Central School in Mill Spring.
Commissioner Ted Owens said he respectfully asks the county to table paying off the loan until the board hears estimates from county engineer Dave Odom regarding connecting water lines.
“I would like for us to consider using [fund balance] money to lay the line to Polk Central,” Owens said. “As I see it, we can’t borrow money to lay a water line and we have a low interest loan to pay [for] the senior center.”
Commissioner Cindy Walker said the conversation came about when the county was setting goals.
“I was excited we could save $316,000 [by paying off the loan],” Walker said. “To me we were saying we can’t make any money in the stock market so we need to pay off loans. I would be willing to table it but want to still look at it again. Maybe we can figure out how to do a little bit of all of it.”
The cost to pay off the loan this year would be $1,376,043, including a $13,600 prepayment fee. The total savings to the county if the loan is paid off this year would be $316,307 over the length of the loan. The loan’s scheduled payoff date is 2024, when the county would have paid another $1,692,350.
If fund balance money is used to pay off the loan, the county would be left with $4,678,353 in its available fund balance, or 20.4 percent of general fund expenditures. Those numbers include the purchase of an ambulance and the county’s recent decision to use fund balance to pay for a water line that will connect its middle school well system to the Town of Columbus’ water line at Polk County High School for approximately $592,000.
Owens said if the county connects water from the lower end of the county to Columbus, water would be connected regionally to Charlotte.
“We’ll already have our regional supply,” Owens said.
He added that the regional supply will help when droughts come and if the county can afford to do it, it will cost less now than in the future.
Commission chair Ray Gasperson said five years ago the county had $23 million in debt and if the loan is paid off the county will be down to $11.5 million.
“It was through the loan payoff that we were able to fund an additional $400,000 to the schools (this fiscal year),” said Gasperson. “This could help move us forward with paying for the 2.5 percent (employee) raise. This would make it a sustainable part of the budget.”
Commissioner Tom Pack said it just depends on how you look at it. He said the county has spent a lot of money paying off debt and that money could have been shared with employees who haven’t had a raise in four years or could have been shared with taxpayers.
Polk’s debt has been reduced over the years through early loan payoffs. The most recent was paying a little over $2 million to complete payments on an original $4 million loan that funded the construction of the middle school, recreation complex and transfer station. Paying off that loan saved the county more than $362,000.
Commissioner Renée McDermott said commissioners started out five years ago with $23 million in debt and have freed up money in debt service since and were able to help the schools by doing so.
“Even if we pay off the loan we will still have $11 million remaining in debt,” McDermott said. “I don’t think when you have $11 million in debt it’s the time to give a tax break.”
Especially, she said, when there are threats of the county receiving less in state revenues.
Pack disagreed, saying that the county’s fund balance grows every year.
“This year you’re looking at spending $1.3 million,” Pack said. “It sounds like we’re in good financial shape.”
Commissioners agreed to discuss the loan payoff further during the county’s first March meeting, set for March 5 at 7 p.m. at the Womack Building in Columbus.