Council to consider plan for landfill loan after bids for Decatur facility come in $800K over budget
By Evan Belanger
The Decatur City Council and Morgan County Commission may call upon the local landfill to help build a 1,200-seat event pavilion at Decatur’s Ingalls Harbor.
The troubled project — now estimated to cost as much as $3.6 million, more than $800,000 over budget — has been on hold since mid-December, when construction bids exceeded the city’s cost projections by hundreds of thousands of dollars.
But the City Council will consider at 10 a.m. Monday a plan that would have the Morgan County Regional Landfill loan up to $1.6 million from its financial reserves to cover the shortfall.
Commission Chairman Ray Long said the commission will consider the same plan for the landfill, which is owned jointly by the city and the county, at 9 a.m. Tuesday.
“We look forward to working with Decatur on making this happen,” he said. “Because the project will be good for both the city and county.”
City officials discussed the financing proposal in a meeting Wednesday at City Hall.
“This will be one of the first true city-county partnerships, and I think that’s a good thing,” said Tami Reist, president of the Decatur-Morgan County Convention and Visitors Bureau.
With a Jan. 28 deadline for the city to award a construction contract, Reist said both the city and the county must approve the plan next week.
After that, the $3.02-million construction bid from low-bidder Fite Building Co. of Decatur will expire. Architect John Godwin said rising steel costs could push prices for the 26,000-square-foot pavilion higher if the city rebids the project.
Under the proposed financing plan, the city would loan up to $2 million from its more than $18-million reserve. That contribution is down from the $2.8 million the council agreed to loan for the project in May.
The landfill would make up the difference, loaning up to $1.6 million from more than $4 million it is holding in certificates of deposit, $2 million of which will mature in time to help fund the construction job.
The Decatur-Morgan County Hospitality Association would repay both loans over a period of 15 years, using revenue raised by its $2-per-night tax on local hotel stays. The association uses the self-imposed tax to fund local projects like the pavilion in an effort to promote local tourism.
In return for the loans, the city would earn more than $61,000 in interest from the hospitality association and the landfill more than $49,000 in interest. City officials said they plan to dedicate their portion of the interest to maintaining the pavilion though.
Landfill Director Ricky Terry said the loan would not impact the landfill’s operations funding, nor would it impact the roughly $13 million the landfill is holding for capital projects and for the future closing of the landfill.
The loan would temporarily impact the city’s reserve. But according to Finance Supervisor Linda McKinney, the city’s reserves would not drop below the $13 million minimum established by council resolution.
It was not clear Thursday whether the full council would support the new financing plan. While Council President Gary Hammon said he would allow its consideration, Councilman Ronny Russell said he was “shocked by the cost” and needed more information before he could support it.
“I don’t know that $1.6 million is something you need to try to rush through,” he said.
The city has already spent more than $71,000 on the pavilion project for design work and site preparation. The project, coordinated by Councilman Greg Reeves with cooperation from several other local officials, is designed to attract more interest to the city-owned boat harbor, beyond its current use as a popular destination for fishing tournaments.
It would more than double the size of the largest meeting spaces currently available in Decatur with the ability to seat up to 1,200 people or up to 700 at tables. While not air conditioned, wood-panel enclosures and heating would enable its use throughout the winter.
If approved this week, Godwin said he tentatively expects construction to conclude in early September, pending weather delays. That could allow the Decatur Jaycees to use it for this year’s Riverfest, set to begin Sept. 18. Jaycees spokesman Jim Page said they are planning for either scenario.