FENWICK ISLAND – Officials in Fenwick Island are one step closer to a final decision on increasing the town’s short-term borrowing limit.
In a Fenwick Island Town Council meeting last Friday, officials approved the first reading of a proposed charter change that would increase the town’s short-term borrowing limit. Currently, the town cannot borrow more than $500,000 in any given year.
With the proposed charter change, however, the town could borrow up to 5 percent of the total assessed value of all non-tax-exempt real property located in the municipality.
Bill Weistling, chair of the town’s Charter and Ordinance Committee, told the council the proposed charter change would increase antiquated borrowing limits.
“This came about several months ago,” he said. “It was Vicki’s (Councilwoman Vicki Carmean) recommendation that the town look into this because our existing borrowing allows funds not exceeding $500,000 in any one year, which has probably been on our books maybe since the charter was enacted.”
Town Manager Terry Tieman said a borrowing limit of 5 percent of the total assessed value currently equates to nearly $1.5 million.
“I think for our town 5 percent will get you through a pretty big construction project,” she said.
Mayor Gene Langan explained the town would not be borrowing money to fund projects in the near future.
“We are not looking to borrow money right now,” he said. “This is just so we have an emergency fallback if we ever needed it.”
Tieman added that increasing the borrowing limit would better facilitate the borrowing process.
“You couldn’t do construction borrowing under your charter for more than $500,000,” she said. “It has to be borrowed and paid off and then borrowed again. This just makes that a little bit smoother in dealing with a financial institution.”
Councilman Richard Mais approved of the proposed borrowing limit.
“I think that would be more than sufficient in this day and age,” he said. “We are lucky we are not responsible for a lot of infrastructure … We’ve basically got our public buildings and streets.”
Carmean, who originally proposed a charter change, said an increased borrowing limit would benefit the town in emergency situations.
“I guess I’m responsible for stirring the pot here,” she said. “For a coastal town, we live in a different area than most communities and we have to accept the fact that we are susceptible to storm damage … I feel more comfortable to have this behind Fenwick in case something really bad happened.”
Councilwoman Julie Lee favored the new borrowing limit, so long as it required a supermajority vote from the council.
“Obviously it costs a lot more to do less in this day and age,” she said. “But I know when we first brought this up we discussed the possibility of requiring a supermajority, not just a majority … I think we ought to discuss that.”
Councilman Roy Williams said he took issue with language in the proposed charter change.
“The problem I had is that we are talking about emergency money, but it doesn’t say emergency money …,” he said. “So four people right now can vote to borrow up to 5 percent, whatever that may be … and we don’t have a vehicle to pay it back.”
Mais, however, disagreed.
“This is not, in my mind, designed to address emergencies,” he said, adding that the money could be used to fund future improvement and replacement projects.
The council voted 5-2, with Williams and Lee opposed, to accept the first reading.
Lee said she was opposed to accepting the first reading unless it was amended to include a supermajority vote, while Williams opposed the charter change in its entirety.