CORNELIA — It's a confusing financial technicality, but the Cornelia City Commission has voted to proceed with advertising for sale the city's North Fire Station.
As part of a low-interest loan obtained by the city to finance construction of the bays for the new fire department headquarters and to pay for the purchase the new ladder truck placed in service last week, the city is advertising the station for sale to the highest bidder, but with conditions.
City Attorney Steve Campbell said the city's bond counsel assures him the procedure is nothing new, and happens around the state.
"There is a loan that the city has put bids out there on that basically uses the SPLOST funds that we are authorized to receive for the next five years as opposed to going ahead and waiting for those funds to come in," Campbell said.
The $1-million loan, from low bidder South State Bank, came in at 1.28 percent annual interest. It was obtained to cover purchase of the new aerial ladder truck and fire department expansion at the station located in the Kmart shopping center.
The 75-foot aerial truck was purchased from E-One, Inc., for $631,939.
R.G. Williams Construction submitted the low not-to-exceed bid of $345,260 for construction of the new engine bays at the North Fire Station.
"This allows the city to go ahead and purchase the fire truck and make improvements to the old Regions Bank building out at Midway," Campbell said. "So to facilitate that loan, basically the city is pledging those SPLOST funds to pay off the loan over time, and to do that my understanding is ... one of the things that as a collateralized loan for bank purposes was to 'sell' the Regions Bank/fire station building to the high bidder under conditions that require them to then build the station and deed the property back to us."
That means whoever bids at least $1 million must complete the work on the building to the city's specifications then deed the property back to the city on its conditions.
"It is a complicated transaction," Campbell said. "We could sit down with Title 36 and go over the exact reasons why this loan should be structured this way, but this is the recommendation of bond counsel. My understanding is that Georgia Municipal Association will be making a bid for $1 million to complete the terms of the loan. They have done this many times for other cities. It is a widely-accepted means of collateralizing the loan."
Asked about the possibility of someone outside government coming in and buying the former bank building, Campbell said, "Technically it could happen, but the conditions that they would have to buy into, for purposes of the loan, would make it so that very few entities would want to take that risk."
The Cornelia City Commission will hold a called meeting at noon Tuesday, Feb. 23, to conduct a public hearing and adopt a resolution to authorize the installment sale agreement with the Georgia Municipal Association and related documents to provide financing for fire department assets, according to a public notice posted by the city.
That called meeting and public hearing will be held in the Cornelia Municipal Courtroom, 156 Foreacre St., Cornelia.
Anyone with questions or input about the financing process is invited to attend.
