Town faces financial challenges including paying for its new police station

Following a January 7 work session overview of financial impacts of various projects and purchases under consideration for the coming Fiscal Year 2020, the Front Royal Town Council zeroed in on one issue of primary concern in, not only the next, but many fiscal years to come. That issue is financing of the new $10.2-million town police headquarters.

Town Finance Director B. J. Wilson reminded council that its chosen method of financing, the nearly decade-long interest free payback through the New Market Tax Credit (NMTC) Program is no longer on the table. As noted in a Council Resolution passed in late November tracing accounting and debt service problems with the town-county Economic Development Authority, a multi-faceted Capital Improvements loan of over $20 million thru the NMTC Program town officials believed had been closed by the EDA, was not.

At Monday night’s work session the town finance director said that part of the problem was that last year’s NMTC loan offering had been centered on job creation – and that job creation was not a primary aspect of coming town capital improvement projects like the police station.

Whatever and wherever the ultimate fault lies, according to the November 26 Resolution the absence of a nine-year interest free debt service on the $10.2-million police station project is projected to cost the Town “hundreds of thousands of dollars per year” above anticipated annual debt service costs.

After seeing annual debt service estimates for the police station in the neighborhood of $580,000 to $730,000, requiring an additional $337,558 to $487,855 in annual funding, Mayor Hollis Tharpe verbalized a worse-case scenario: “Wouldn’t it be terrible if the new police department (headquarters) was foreclosed on?

“I see the camera is rolling,” the mayor noted of Royal Examiner’s video equipment. And indeed it was, as evidenced in these videos of the police headquarters financing discussion and the finance director’s FY 2020 Budgetary Overview.

We would offer that the mayor’s foreclosure comment was offered less as a likely scenario, than as a reminder of the seriousness of the multiple financial challenges council faces in finding additional revenue streams to cover costs in the coming fiscal year.

But see for yourself in these Royal Examiner videos of the police station financing discussion, as well as Finance Director Wilson’s budgetary overview of what is on the table for funding in Fiscal Year 2020.