September 6, 2006

Published in Wake Forest, NC

            The only surprise was the cost of the insurance office and land owned by John E. Wooten Jr. and his wife, Shirley. The town will pay $495,000 in cash for the small one-story building and 0.64 acres.

            Separately, the town has agreed to deed half an acre on East Holding Avenue next to the senior center to the American Legion and construct two modular buildings there: a building with an office, kitchen, storage, bathrooms, a meeting room and a large multi-purpose room along with a separate smaller storage building. Part of the agreement is that the new buildings will be ready for use by the Legion at the time of the closing for the swap.

            The 4 to 0 vote for the purchase and swap came after a 20-minute closed session continued from last month. Commissioner Stephen Barrington was absent.

            The actions give the town a compact tract running along Brooks Street and extending to South Franklin Street. The town already owns the parking lot at the corner of Brooks and East Owen, the original town hall (now used by the planning and inspections department) and the two small houses to the north on Brooks. To the east are the police department and parking lot, the existing town hall (due to be demolished) and its parking lot with access to East Elm Avenue, and the H.L. Miller Park that stretches along South Franklin.

            The board did get a jolt later, during the work session, when Finance Director Aileen Staples said the new town hall cost could be $12.5 million. When the building was first discussed, during the preparations for the 2005 bond issues for streets and parks, the cost was $5 million.

            Staples said the $12.5 million figure was high, but Commissioners David Camacho and Frank Drake agreed construction costs have risen sharply.

            “That’s the first we’ve seen twelve point five,” Camacho said, and he added the price “depends, when we get to the design stage, what we opt to include.”

            Drake asked if the town, once there is a design, could save money by buying steel and other materials and warehousing them. “That’s a pretty costly venture,” Camacho replied. “You’ve got to pay to put it somewhere.”

            Staples said the town budgeted $200,000 in the previous fiscal year and $250,000 this year for architects’ fees, which are estimated to be about $450,000.

            “Now we know we have the property, [it will be] sometime after the first of the year to have the preliminary plans and an estimate on the cost,” Town Manager Mark Williams said.

            Staples said the commissioners need to be really aggressive about setting aside money to pay for as much of the new building as possible out of savings.

            There is already something over $600,000 in a capital reserve fund for the town hall, and Staples said that reserve fund is expected to grow to $1.8 million by the end of June 2007.

            “This will allow us to ‘pay as you go’ for any architect fees or land acquisition costs through fiscal year 2007,” she said.

            The plan now is to save as much as possible in the next two years to reduce the amount of money the town will borrow on a 15-year level principal note. “The more we save, the more interest we earn and decrease the amount we borrow.”

            Staples offered three savings scenarios:

            -- saving $2.75 million and having interest on a loan of $3.7 million

            -- saving $4 million and having interest on a loan of $3.2 million

            -- saving $5 million and reducing the loan interest to $2.8 million

            “I would love to try to set aside five million,” Staples said.

            “What is the plan to get from one point eight million to two or five million,” Camacho asked. “If we don’t spend anything outside of budgeted items, we will have five million.”

            Continue with conservative budgeting, Staples said. “I foresee us having a really good oh-six, oh-seven (the current fiscal year 2006-07) year.” There will be more revenue than expenses, she said, because she estimates revenues on the low side, expenses on the high side. “We can set that money aside.”

            “We can consider not starting any new programs for the next year or so,” Mayor Vivian Jones said.