Down payment of $800,000 to support New Kent emergency radio system; county hires firm for attorney purposes

New Kent supervisors have opted for an $800,000 buy-in as a down payment to the Harris Corporation to help with start-up of an emergency communications system.

Using money from the Fund 7 account (reserved account for capital improvement), supervisors chose the plan over two other options to support construction of the radio grid during Wednesday morning’s work session. The county is expected to borrow no more than $4.85 million from C&F Bank to support the project.

At the March work session, county leaders elected to negotiate with Harris Corporation to help construct an emergency grid after talks to join the Gloucester-James City-York network collapsed. Harris Corporation emerged, offering to build a $5.5 million standalone network. At that meeting, supervisors requested staff to find financing options. Staff returned to April’s work session with downpayment option.

Option one focused on the aforementioned $800,000 payment with the $4.85 million loan. In turn, the option would repurpose one penny from the Historic School project, with one additional penny added to the real estate tax in FY2017-18 and FY2019-20. The penny in FY2019-20 may be unnecessary if economic development and business increases.

Option two was similar to option one, with the exception that a downpayment of $1 million would be made and a loan of $4.64 million would be taken out. Option three focused on a $1.77 million down payment, resulting in borrowing $3.878 million from the bank. Option three would require a repurpose of one cent from the Historic School project, but would only require a single penny tax increase in FY2017-18.

County administrator Rodney Hathaway said staff was comfortable with the first option, saying that future New Kent plans played a role in their recommendation.

“As staff looked at it, we felt that the future projects on our Capital Improvement Plan could be addressed if we saved money with a lower downpayment,” said Hathaway. “Option two really didn’t affect the tax rate and we felt option three restricted funding for other future projects.

“As we told the board, that penny in FY2019-20 may not be needed and that’s what we’re hoping for,” the county administrator concluded.

In a related matter, supervisors approved a contract with Federal Engineering for on-call services for the public radio system. The contract will allow a federal engineer to supervise the radio construction project to meet all regulations that are required.

In an unrelated matter, the law firm of Hefty, Wiley, and Gore has been appointed as New Kent County attorney. The group currently represents local governments in Surry and Amelia counties and was recommended by outgoing county attorney Michelle Gowdy. Gowdy is leaving the position to accept a similar post in James City County.

The new law firm will charge a flat fee of $120,000 per year for all services. However, that contract may be terminated at any time by either side. The firm says it expects to save the county up to $100,000 through services and health insurance costs. The county paid Gowdy’s health insurance as part of her employment contract.