- Last Updated on 12:00 AM 02/11/11
- BY Sonny Riddle
“What sites were considered for the location of that facility?” asked Halifax Vice-Mayor Bill Confroy, speaking to Halifax County Service Authority (HCSA) representatives Doug Bowman and Major Wray during Halifax Town Council’s regular monthly meeting Tuesday night. Confroy, who also is chairman of the town’s Business Development Committee, and Councilman Jack Dunavant, chairman of the Current Affairs Committee, led council’s discourse with Bowman and Wray on the process that led the service authority to approve relocation of its administrative and operations departments in the single facility currently under construction in South Boston’s Houghton Industrial Park at a cost of up to $600,000.
Bowman, who also is chairman of the HCSA board, explained the objective of the board was to find a site that would house both the administrative and operations staff of the authority, numbering 16.
Bowman also explained the second objective was ownership of the building.
“Being a long-term business, we wanted to own it rather than rent it,” Bowman said. “We needed about 8,000 square feet of building, half of which would office administration staff, and the other would house a high bay shop.”
The HCSA chairman also said they would need about an acre for outside storage of inventory and the authority’s trucks and adequate parking for customers and staff.
Bowman dispelled the thought that this would be a move only for the administrative office. “From the beginning we thought at some point we needed to be independent from the municipal support we were getting and run our own business,” he said.
Confroy asked the service authority representatives about a projection in the original HCSA agreement with the towns and county that a surplus of revenue from water of about $740,000 and a surplus of revenue from sewer of about $780,000 would exist after 10 years of operation, and those would be used to defray a rate hike at the end of that period.
“If you say there won’t be any rate increase, where is the money going to come from to pay for the building?” Confroy asked.
Bowman explained the arrangement the authority has with the South Boston Industrial Development Authority (IDA) would cost the HCSA about $55,000 a year for 15 years. He said the rental options would cost at least $45,000 each year, and one property that would provide space required would cost about $72,000 a year in rent.
Bowman said the difference between renting and owning would be about $10,000 per year. “And in a $4 million budget, $10,000 is not going to make a rate hike impact,” he said.
Confroy said comparing rent to the lease purchase, the HCSA would pay $216,000 over 15 years to rent and $826,020 for the lease purchase, a savings of $610,020 over the 15 year period by renting.
Bowman explained the county has charged the authority over the years for office space and for serving as fiscal agent. He said the annual charge began at $60,000, rose to $102,000, and it would increase to $144,000 yearly.
“I didn’t agree with that, but that’s the county’s point,” Bowman said. “And they also made it clear they wanted us to have an exit strategy, they wanted us to be out of the (County Administration) building. So that’s what precipitated the relocation project on the service authority’s side.”
The HCSA chairman also said the Town of South Boston would not let the authority continue to use the 4,800 square feet of space rent free at the town shop for much longer.
He said the South Boston IDA approached the service authority with its proposal at the time HCSA staff were looking at potential sites. Bowman said they did not find a site they could own, and they did not want to locate on a main thoroughfare.
Bowman said the site that was offered to the HCSA has never been on the tax rolls because the town owns it, and it is not on a main thoroughfare, and it has access to about 80 percent of the authority’s customer base.
He confirmed the HCSA did not hire a professional realtor to search for a building to rent, nor did they check with the county IDA.
Confroy said the Town of Halifax depends on the county IDA, and the town was never approached as far as whether or not it had any suitable sites. “We’re fighting tooth and nail to retain whatever businesses we can,” he said. “Traffic to that office helps merchants in our town, and we’re going to lose that.”
Bowman said the town was aware the HCSA was looking to relocate, and Halifax Town Manager Carl Espy agreed, saying it was informally made known to council.
Bowman said the town had the opportunity to make known to the service authority that it had sites that may have been suitable. The HCSA looked at the former grocery property that now serves as home to the Halifax Farmers Market.
Confroy reminded Major Wray that he was appointed to the service authority to represent the Town of Halifax, and he should have come to council to inform the members the HCSA’s relocation was imminent.
“All we ever heard was hearsay,” Confroy said. “We should have received more consideration. I don’t think there was enough transparency as far as the whole issue is concerned.”
Wray said he should have appeared before council. “Had I realized that it was important for the town council and me as a representative for the Town of Halifax,” Wray said, “and not realizing that council did not know about all this, I surely regret not having appeared before council.”
Mayor Dick Moore said he had thought the authority was only going to move its office from the county office building, and he did not know the authority wanted to consolidate everything into one location.
“We do have office space, but we also have a building that is listed with the county IDA that just happens to be 8,000 square feet,” Moore said. “It is for sale, it’s available right here, and it’s located on 501. It would be a great location, and the purchase price is a lot less than $575,000.”
Confroy said the building and property is priced at $384,026, and it could be rented or leased. (See sidebar)
Moore also said when the project was advertised it was for only the building. He wanted to know if fencing, paving, landscaping and other items would be included.
Bowman said there is $35,000 for contingency, and that is to include fencing, landscaping and outside security. He said paving is in the building work. “It’s guaranteed not to exceed $600,000, and we feel it will be more like $575,000,” Bowman said.
Confroy raised an objection that county and town officials serve on the authority, saying he believes it is a conflict of interest. Bowman responded, saying the initial board had three elected officials on it to provide some continuation from the working group, which was comprised of two elected officials from each of the three localities.
He said the board contained three elected officials for the first term. “When Mayor Plaster’s term expired he stepped off, and when my term expires this June 30 I’m stepping off,” Bowman said. “All successors are at large. The service authority board nominates a successor, subject to the confirmation of all three localities.”
Bowman said the initial board consisted of three representatives from South Boston, two from Halifax, one from the county and one at large, for a total of seven.
Confroy said, “Even if I agreed with the HCSA’s decision, it would still be the wrong decision.
“Most of the issues that divide our communities are those best described as a zero-sum game where one person’s or group’s gain is of necessity another’s loss,” he said.
“The decision of the Halifax County Service Authority is a perfect example of excluding all the partners of the service authority of the opportunity presented to one and not the others,” Confroy continued.
“Is it any wonder that as a member of the town council of Halifax, I am upset that our representatives on the HCSA never considered what the loss of that office would be to our town.”
After questioning from Dunavant and Moore, Bowman reiterated the HCSA is locked in to no more than $600,000 on the building, and they are paying $43,000 for the purchase of the lot at zero interest separately for a 15-year non-interest bearing loan. He said the total of those two payments is $55,000. “We will not go above $55,000,” he said. “At the end of 15 years, the site is ours.”
Dunavant said he believes the problems with the issue of the new building were communication and transparency, and he said council members have been getting calls from people who are dissatisfied about the water and sewer rates.
He said he has observed what looks to be new equipment, and he asked Bowman about that. “What I’ve seen looks new to me,” Dunavant said.
“I don’t think we’ve bought a brand new vehicle in three years,” Bowman replied.
Confroy said different people heard different things about the HCSA relocating, nothing was ever put on council’s agenda, and council members never seriously discussed it.
“We’re just beating a dead horse to death,” Confroy said.