Businesses ask for help

Published 12:00 am Wednesday, February 27, 2008

AHOSKIE – Gains from business development vs. infrastructure outlay….those two, while working in tandem, often place a burden on towns and counties without the benefit of immediate cash-on-hand.

That’s the dilemma now facing the town of Ahoskie. On one hand, Roanoke Electric Cooperative (REC) will soon begin construction on its new headquarters and shop/warehouse on property, located along NC 561 near Frazier’s Crossroads, annexed late last year by the town of Ahoskie. Coupled with that are plans by CADA (Choanoke Area Development Association) to build a new Head Start facility near the Roanoke Electric property.

While Ahoskie officials welcome the new businesses, complete with nearly 100 jobs between the two, the town is wrestling with how to pay for the water/sewer infrastructure required within the annexed areas.

On Monday, members of the Ahoskie Town Council listened as REC and CADA officials pitch a plea for help in paying for the infrastructure.

The bottom line figure facing Ahoskie is $235,000 to supply the annexed area with water/sewer. The majority ($144,500) of that money will be spent on sewer lines and a pump station.

“Based on my conversations with CADA and REC, they are requesting the Town of Ahoskie absorb the entire cost of this project,” Ahoskie Town Manager Tony Hammond said. “We have to provide services to annexed areas.”

Hammond informed council members of a town ordinance that requires a 15 percent reimbursement to the developer (the town) for infrastructure. In this particular case, that reimbursement will amount to $31,875.

Ahoskie can also recoup some of its investment in fees. REC is expected to pay $27,625 in capacity and tap fees while CADA’s bill for those same fees amounts to $34,000. REC will also generate $46,000 annually in property and business tax revenues. CADA, as a non-profit organization, is exempt from those taxes.

However, as Hammond pointed out, the infrastructure outlay must come from the town’s Enterprise Fund, not the General Fund. He said state law prohibits a municipality to support its Enterprise Fund from its General Fund. The taxes REC will pay goes directly to the General Fund, so, in essence, the town will not be able to recoup its investment.

There is one possible other source from which to fund the entire infrastructure project. Hertford County Economic Development Director Bill Early was at Monday’s meeting where he informed the council of possible help from the Golden LEAF Foundation.

“We sought grants from other entities for this project, but some of those grant sources will not fund projects involving utilities (REC) while others will not fund non-profits (CADA),” Early said. “Golden LEAF likes to come in once other resources have been exhausted.”

Early confirmed that a request has been forwarded to Golden LEAF for fully funding these projects.

“Their board meets in March and we hope to have an answer soon after that meeting,” Early said.

Marshall Cherry, REC Vice President, said at Monday’s meeting that he understands if the Golden LEAF Foundation turns down Hertford County’s request, his company would be responsible for the majority of the $235,000 infrastructure costs.

Cherry pointed out that REC would be investing $5-$7 million in its facility as well as bringing 62 jobs, with a payroll in excess of $3.6 million, to Ahoskie. He also said that REC employees would shop and dine in Ahoskie while the company plans to purchase fuel, auto parts and maintenance services from local vendors to keep its fleet of over 30 vehicles running.

“We are looking at this from a progressive economic development standpoint,” Cherry said. “Not only from relocating our business to Ahoskie, but actively recruiting other businesses to come to Ahoskie and Hertford County.”

CADA Executive Director Sallie Surface said at Monday’s meeting that her organization was excited about the possibility of building a new Smart Start facility in Ahoskie. She said the facility, scheduled to open in 2009, would be the home of up to 130 children (ages birth to four years) as well as 20-25 staff members.

For CADA to begin building a business plan for the facility, Surface said she must know if there will be any additional costs above the $34,000 capacity and tap fees. Surface said CADA could not afford to outlay any additional money for the project.

“We’re not a money making operation; we rely on grants and loans to operate,” Surface said. “We need to know something by the middle of March so we’ll know which way to go. If it’s not in Ahoskie, we will look at another location.”

At the end of the two presentations, Councilman Ronald Gatling said he was comfortable with the fact that the board would be willing to negotiate a deal with REC.

“We welcome you to Ahoskie as well as CADA if they decide to carry through with their plans, but we can’t afford to write a check right now for $235,000,” Gatling said. “If we did, then there would be a line at our door, those asking why we aren’t funding previously requested projects such as a new town library or new fire station.”

“We understand the town’s position,” Surface said. “We want to work with you. We hope you understand our bottom line.”

Cherry responded by saying, “We are open for discussion. Our request is that we don’t have to pay the lion’s share (for the infrastructure).”

Ahoskie Council members agreed to address these requests again at their next meeting on March 11. In the meantime, they instructed Hammond to further discuss the issue with REC and CADA officials.