State denies county?s capital outlay note

A controversial move to avoid a property tax increase could result in a significant delay in the road and bridge project at Mountain View Industrial Park.

A budget amendment spearheaded by Commissioner Terry Bell at the commission?s August meeting was based on using capital outlay notes to fund a number of projects, totaling close to $800,000, that would have otherwise required a property tax increase of around 17 cents.

The road and bridge project accounted for $294,875 of that amount, and the commission passed a resolution authorizing capital outlay notes up to, but not exceeding, this amount at its November meeting. The money was to be used to fund a road project at Mt. View Industrial Park needed to open up a large tract of land to facilitate recruitment of new industry.

Even though the commission approved the measure, the county had to apply to the state for approval of the capital outlay notes. This approval has been denied.

While the $294,875 note was rejected, county officials don?t anticipate problems with the other $500,000 in capital outlay notes.

County Executive John Pelham has received a letter from the state declining approval until the county obtains a Certificate of Public Purpose and Necessity, a complex process that could take as much as three months, or more, to complete.

?This is another hoop that we?ve got to jump through that we did not know about,? Pelham said, ?which is a result of doing these capital outlay notes. The state advised us this is a tremendous amount of work and effort for this amount of money. We?re not saying it can?t be done, but it would take a lot of work.?

There is even some question as to whether the effort and expense would be worth it in the long run.

?From what I understand,? said director of accounts Linda Hillis, ?just because we go through this process doesn?t mean the state is going to approve it.?

And the process is a complex one.

?There would be additional resolutions that would have to be passed,? Hillis said, ?and there will have to be public hearings.?

One state official Hillis spoke to went so far as to advise the county to avoid it, if possible.

?His comment to me was, ?You need to find some way around this if you have any flexibility in your budget.? And I said, ?No, not this year we don?t.?

Pelham hasn?t ruled out applying for the Certificate of Public Purpose, but Hillis noted that even if things moved as quickly as possible, it would be at least March, which would be getting close to another budget year and the county might not save much time by going through the complicated application process.

Pelham says this may not the only way to deal with the issue. One possibility is having the IDB borrow the money, and then reimbursing the funds in the next budget.

This is the second major issue county officials have had to deal with in an attempt to use capital outlay notes. The first obstacle came when the county was advised by the state it could not legally finance the industrial park road project using that method because capital outlay notes can only be used to fund projects on land owned by the county, and the land was owned by the Industrial Development Board. County officials got around this obstacle fairly easily by deciding to have the IDB deed the land for the road back to the county.

But even with all the problems the capital outlay funding method has presented, Pelham says he is not willing to give up on the industrial park road project, which he feels is much needed if the county is to recruit new industry.

?Is this another hoop we?ve got to jump through?? Pelham asked. ?Yes it is. But are we going to give up? Never.?