One week after the special meeting called for the express purpose of approving a temporary financial solution to moving an estimated three-month order and installation process on a new town police radio system forward, failed to do so, a fully-manned Front Royal Town Council accomplished that goal on September 10.
Council’s two primary proponents of moving the purchase forward as quickly as possible, William Sealock and Jacob Meza, had alerted their colleagues they would be absent for the September 4 special meeting. However, they made it clear they supported the solution of a temporary internal loan of the full price of $545,000 to set the delivery-installation process of a Motorola digital VHF radio system in motion.
On September 10, Councilman Chris Morrison noted the September 4 delay he asked for in order to become “more educated” on exactly what was being approved as a stop-gap funding measure. Morrison asked Town Manager Joe Waltz to summarize that proposal so the public could receive the “same education” he had in the intervening week.
Council scheduled the September 4 Special Meeting following new information received prior to a scheduled August 27 vote to approve the purchase through a permanent internal loan of $545,000 from General Fund reserves. That new information was that an unexpected $1.2 million of the General Fund reserve of $1.5 million would be lost to unexpected retirement fund commitments related to a program known as Governmental Accounting Standards Board Pronouncement 75 or GASB 75. As previously reported, while the Town began setting aside money for GASB 75 in 2014, recently acquired information shows the authorized set aside fell short of required funding by the aforementioned $1.2 million.
The bottom line was that the planned long-term internal loan paid back as council saw fit over a period of time it determined at 10 years, would not leave the anticipated $968,000 above the minimum suggested General Fund surplus, but perhaps next to nothing when other retirement funding requirements become known, Finance Director B.J. Wilson told council on August 27.
The total General Fund balance that supports the Town’s non-self-supporting fee-based or utility endeavors (Enterprise Funds) is currently estimated at approximately $7,632,807 – though that is now forecast to be reduced by the $1.2-million or more anticipated to be appropriated into retirement programs.
However, the $545,000 internal loan finally approved on September 10 would be repaid in full following council’s decision on a long-term financing option – unless council adopted Morrison previously-expressed idea of partially funding the radio purchase internally and partially through outside financing.
As Royal Examiner has reported, outside financing options include the new staff-recommended 10-year Virginia Municipal League (VML) loan with annual payments of $65,821 at a 3.55% interest rate totaling $113,205 in interest payments over the loan period. That compares to the now-rejected full internal loan, 10-year payback with annual payments of $54,500 with no interest involved.