Vote set for using City Hall properties as loan collateral
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ELKINS -- Elkins City Council approved the first reading of an ordinance which, if passed in the final reading, would approve using the City Hall parking lot and the Elkins Fire Department as collateral for financing of the City Hall renovation project.
During the most recent City Council meeting, the nine present council members voted in favor of the first reading of Ordinance 353, which deals with “the transfer of real property” made up of the City Hall parking lot and the Elkins Fire Department to the Elkins Municipal Building Commission. First Ward Council member Cody Kerns was absent from the meeting.
Council will vote on the second and final reading of this ordinance during their meeting on Thursday.
According to the Agenda Item Report that lays out the ordinance, the transfers to the Elkins Municipal Building Commission are “required to provide additional security” for Mountain Valley Bank's permanent financing of the City Hall renovation project.
On June 11, council members voted in favor of Resolution 1931, which accepted and approved "a proposal from Mountain Valley Bank for financing of the City Hall renovation project." The bank’s financing for the project includes a principal amount of $4,108,000, a term of 32 years and a fixed interest rate of 4.75 percent.
According to a letter of commitment dated June 3 from Mountain Valley Bank President and CEO Douglas Weese to Elkins City Treasurer Tracy Judy, Weese laid out the bank’s financing offer and asked that three properties be used as collateral. This included the first Deed of Trust for 401 Davis Avenue, which is Elkins City Hall, the first Deed of Trust for 142 Robert E Lee Avenue, which is the Phil Gainer Community Center, and 216 4th Street, which is the Elkins Fire Department.
Elkins City Attorney Geraldine Roberts wrote a letter dated Sept. 1 to the City Council explaining why the ordinance was necessary for the transfers.
“As a condition of the loan, the City needs to pledge additional properties besides City Hall as security for this loan which are outlined in the MVB (Mountain Valley Bank) letter of commitment,” Roberts wrote in her letter. “Although this loan is to the City, as you know any long-term loan commitments can only be made by the Municipal Building Commission… as was done for the new Sanitation Building and for the upgrades to the PGCC (Phil Gainer Community Center).”
Roberts also noted that the City Hall parking lot was added to the collateral as Mountain Valley Bank had “conditioned the loan on having this parking lot property as part of the security for the loan.” She also explained that, despite the bank’s request, the Phil Gainer Community Center would not be included as collateral, as the property was already transferred by the City to the Elkins Municipal Building Commission in 2019, when renovations were made to the center.
Also during the most recent City Council meeting, the nine present council members approved Resolution 1951, which accepted a bid and authorized an agreement to purchase a sanitation truck for $258,395 from Newlons International Sales, LLC.
According to Resolution 1951, bids for a new sanitation truck were publicly opened and tabulated on Aug. 20, and Newlons was the only company to bid. The company submitted two bids offering different equipment configurations in the amounts of $253,245 for a truck without a compactor and $258,395 for a truck with a compactor. The resolution states the truck configuration offered at $258,395 includes the same type of compactor already used in the City's other sanitation trucks, and that “selecting a consistent compactor configuration will support operational familiarity, maintenance efficiency and parts compatibility across the City's sanitation fleet.
Before Council voted, Judy noted that, if the resolution passed, she would be putting out a bid for financing and would bring the winning bid before Council at a later date. According to the Agenda Item Report attached to Resolution 1951, the $258,395 would be an expenditure from the City of Elkins’ Sanitation Fund. Operations Manager Michael Kesecker told Council that this purchase was planned for.
“It’s an investment that we need,” Kesecker told councilmembers. “Built into the budget, for our budget for this year. So, it’s not a hit on our budget. We were fully expecting this purchase, and we’re ready to move forward.”
Second Ward Council member Lisa Severino asked Kesecker if this purchase was being made to replace an older sanitation truck. Kesecker explained the department will be phasing a truck out and the new truck will replace it in their fleet. When Fifth Ward Council member Cody Thompson asked if the Sanitation Department would keep the old truck as a back-up, Kesecker said yes.
Fourth Ward Council member Andrew Carroll then asked Kesecker how long sanitation trucks stay in service. Kesecker said with the new truck, officials are hoping it will last 12 to 15 years, but he noted that the City’s sanitation trucks run every day, except for the weekends, and there is a lot of wear and tear that comes with that overtime.
Elkins City Council will meet again on Thursday at the Phil Gainer Community Center at 7 p.m.