Starkville aldermen previously bemoaned the issuance of certificates of participation to construct a new city hall and their subsequent passage by the prior administration as a financial burden that circumvented the will of the people.
Now, six aldermen expanded the COP financing limit to a maximum of $3 million to either help purchase Cadence Bank for the Starkville Police Department usage or renovate the existing City Hall as police’s long-term home.
Only Ward 4 Alderman Jason Walker opposed the action Tuesday. He took exception to what he called his peers’ intent to purchase the Main Street property before understanding how future costs associated with programming, renovations and overall growth will affect the city’s bottom line.
Aldermen have eyed buying the bank’s Main Street location for months now. The board is expected to negotiate a $2.55 million-maximum purchase in the future, but a financial shell game is developing to cover those costs.
Starkville listed its current administrative home and surplus lagoon property for sale after appraisals placed the properties’ values at $800,000-$900,000 and $420,000-$600,000.
Almost $1.3 million in certificates of participation left over from the prior administration’s public-private City Hall construction project were earmarked for renovations to the city’s current home, but board attorney Chris Latimer previously told aldermen they can shift those monies to cover property acquisition costs.
Last week’s board action approved a non-binding intent notice to increase that amount to $3 million, which gives aldermen flexibility for a purchase if the city cannot find a buyer for its two properties.
If the Cadence deal does not go through, it also gives Starkville flexibility to make additional renovations to the current City Hall for continued SPD usage.
The usage of certificates of participation were hammered last term by Ward 1 Alderman Ben Carver, Ward 6 Alderman Roy A. Perkins and Ward 7 Aldermen Henry Vaughn after a 4-3 vote initiated the public-private partnership and subsequent construction and financing efforts.
All three aldermen voted in favor of expanding the financing option.
The project itself was a major issue in that year’s municipal election, as many candidates campaigned against the process. Since the public defeated a previous bond referendum to build a new police station at the corner of Miss. Highway 182 and Jackson Street, many incumbents’ opponents said the public-private partnership to build a new administrative home went against the will of the people.
Court battles over the plan followed, but no relief was granted to opponents. The previous board, however, was warned by the Miss. Ethics Commission to adhere to the state’s Open Meetings Act, but no actual penalties emerged.
Once the new board was in office, Perkins, who serves on the city’s audit and budget committee, continued his attack on the certificates of participation, saying they tie up a large portion of Starkville’s income for future debt service.
While general obligation bonds give the city specific taxing authority to ensure debt service, Starkville’s certificate of participation payment plans utilized projected revenues and other monies free in the budget.
As aldermen enacted the city’s first substantial tax increase two years ago, they blamed increasing costs – financing for City Hall, specifically – as the cause.
Although the board appears on track to purchase Cadence, Ward 5 Alderman Scott Maynard, who chairs the budget committee, says the entire deal mostly hinges on the city’s ability to sell its own property. He also agreed with Walker’s assessment that cost studies are still needed for both potential Cadence operations and renovations needed to City Hall if the board decides to abandon the bank purchase.
“(Architect) Gary Shafer is looking at both buildings to see what the true renovation costs are for each. I’m not convinced we can renovate the existing building for $1.3 million, and that’s the item everyone is really waiting on,” he said.
The board is considering allowing Cadence to continue operating the facility’s drive-thru teller window, which would give the city a minor revenue stream. However, SPD Chief Frank Nichols previously said a larger bank presence could create a security issue for his department and the public.
Aldermen once indicated a desire to move Starkville Municipal Court into the Cadence property, but the programming’s estimated seven-figure price tag has tempered those calls.
Carl Smith covers Starkville and Oktibbeha County for The Dispatch. Follow him on Twitter @StarkDispatch
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