Culpeper supports Salem VFD bailout

BY DONNIE JOHNSTON

The Culpeper County Board of Supervisors on Tuesday voted unanimously to help rescue the Salem Volunteer Fire Department from  a nearly fatal financial predicament.

The county passed a resolution entering into a “moral” obligation to back the Salem unit, also known as Company 8, should it default on a new debt restructuring obligation that was unveiled at the board’s meeting.

The effort will, in essence, save the struggling fire company, which had to sell  some of its equipment two years ago in an effort to make its loan payments.

Just before the economy tanked in 2008, Salem built an impressive $3 million building that included an equally impressive $20,000-a-month loan payment schedule.  By 2010, the fire company was in default and on the verge of going out of business.

Early in 2011, County Administrator Frank Bossio began working on a plan to reduce Salem’s debt to a manageable level. Last fall, he struck a deal with Salem’s lender to reduce the debt from $3 million to about $1 million.

Now Bossio has worked a deal with the U.S. Department of Agriculture and the county and town’s Industrial Development Authority to get the money to pay off the $1 million bank loan.

The new arrangement lowers Salem’s payments from $20,000 to $4,700 a month.

“They have enough money in the bank to pay that mortgage for one full year,” Bossio told the supervisors.

Supervisor Larry Aylor said he voted for the resolution with mixed feelings.

“When they came to us several years ago, this board made it clear that we would not provide any funding, only our support for the effort,” Aylor said. “I do not want to set a precedent here.”

Chairman Bill Chase said he did not like entering into a “moral” obligation because he didn’t know what that meant.

County Attorney Sandy Robinson said a “moral” obligation meant that the county would not be legally required to pay off the loan should Salem default again, but could lose its excellent bond rating if it didn’t.

“We’ve already morally shown that we support [the refinancing effort],” said Supervisor Sue Hansohn.

Bossio told the board that a clause in the deal would give the county title to the property should Salem default, and the county opted to back the loan.

Salem District Supervisor John Coates, who was one of the founding members of the Salem Volunteer Fire Department, told the board that those who entered into the original agreement “had good intentions.”

In other action Tuesday, the board voted to drill several exploratory wells south of town before deciding how best to provide water to the Coffeewood Correctional Facility near Mitchells.

If those wells pan out, the county could service the penal facility directly. If they don’t, the county could send water from a well at the youth league complex to Eastern View High School and back-flow it through the town and then on to the prison.

Coffeewood and the state will pay for lines to be run between the town and the prison, and give the county (and possibly the town) about $292,000 a year for the water service.

The supervisors also agreed to consider a request from Bill Flathers of the Airport Advisory Committee asking that the county drop its property tax on airplanes to “the state minimum” to attract commercial aircraft to Culpeper Regional Airport.

The county now charges 63 cents per $100 of assessed value for airplanes. The Advisory Committee’s proposal would drop the rate to .001 cent, bringing in an average of less than $5 per plane.

Culpeper County now gets about $35,000 annually for the 132 aircraft located at the airport.

Flathers said that the airport requires  only a 3 percent county subsidy now and should be totally self-sufficient,  and probably profitable,  by 2014.

Donnie Johnston:

djohnston@freelancestar.com

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