City keeping funding options open

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Council passes two ordinances to seek financing for Memorial demolition

Cumberland Times-News, September 25, 2012

Kristin Harty Barkley

CUMBERLAND — City leaders still plan to borrow around $3.5 million to demolish the old Memorial Hospital — and another $1.5 million for additional infrastructure projects — but exactly how the bonds will be financed isn’t yet certain.

So Mayor Brian Grim and council did something a little unusual Tuesday night.

They voted to ask for the money twice — on paper anyway.

Council approved 5-0 two ordinances Tuesday — one to issue $5.25 million in bonds for the projects through the Maryland Local Governmental Infrastructure Financing Program, the other to issue $5.69 million in bonds for the same projects through private sale.

The city plans to pursue one avenue or the other, depending upon which funding comes through. But technically, they’re opening the door to borrow close to $11 million.

“I have a lot of heartburn with having two of these ordinances out there with the dollar amount they have,” said Councilwoman Mary Beth Pirolozzi. “... There are many, many steps in this process, but it’s just that as we’re trying to come out of this fiscal crisis we’ve had, I’m concerned about the public perception.”

City Administrator Jeff Rhodes said the city initially intended to finance the bonds through the Maryland Local Government Infrastructure Financing Program, but he was told late last week that the demolition project isn’t eligible.

“They have sort of reversed themselves and do not believe they can fund the demolition of Memorial Hospital,” Rhodes said. “They don’t see it as an infrastructure project ... It kind of caught us off guard.”

Because the agency could reconsider, Rhodes said he believes the city should keep that financing option on the table because it’s slightly cheaper.

“We’re introducing a second ordinance to protect ourselves, basically, to cover our bases and allow us to go out privately and borrow money if we need to, which is something we’ve traditionally done in the past,” Rhodes said. “What we’re doing is keeping as much access to funding as we can.”

Maintaining the old hospital buildings has cost taxpayers an estimated $2.5 million over the past 2 1/2 years, city officials have said.

Demolition, which would not affect the campus office building, is expected to cost anywhere from $2 million to $3.5 million, Rhodes said.

Other infrastructure projects to be funded through the bond issue include water main replacements, the repair of the East Side fire station roof and replacement of two Fort Hill Reservoir valves. Any remaining funds would be used by the city’s pavement management program, Rhodes said.

“We have to be very clear that while there are different levels of approval of up to $10.5 million of funding on this agenda, the intention is not to take out $10.5 million of funding,” Grim said. “The intent is to take up to $5 million.”

Rhodes said it’s not unheard of for cities to use the double-ordinance procedure, but it’s unusual for Cumberland.

Comptroller Joe Urban said it’s his job to see that only one bond issue is pursued.

“The stop gap is standing right here in front of you right now,” Urban said. “As the comptroller I cannot and I will not and I would never finance any more than one of those bond issues. That’s my responsibility.”

Contact Kristin Harty Barkley at This e-mail address is being protected from spambots. You need JavaScript enabled to view it. .