Town officals consider $4 million loan

Ocean View officials have made the first step needed to approve borrowing up to $4 million for the town’s planned new police station. At their Nov. 1 meeting, town council members held a first reading of the ordinance that would allow the loan amount — an increase from the $3 million originally considered.

In discussing the loan, council members said they felt it was unlikely they would need the full $4 million but wanted to authorize it in case the costs went above $3 million, in order to avoid having to re-draft and past multiple ordinances authorizing higher amounts.

Mayor Gary Meredith, in reading the ordinance, emphasized that it did not mandate the town borrow $4 million, but instead allowed it to borrow as much as $4 million, if needed.

Council Member Eric Magill sounded a note of caution on the increase from $3 million, which he noted worked out to about $70,000 per year additional in payments for the town.

“It’s not going to break us,” he said, “but I don’t think we should add to our financial burden without an increase in income.”

Town Manager Kathy Roth confirmed the $70,000 estimate but noted that real estate transfer taxes were expected to be up in the future, based on rising property values. She said she would run the numbers on revenue and the loan again once bids for the project were returned.

The bid packages for the police station project are due to go out any day now, with the town merely awaiting confirmation from its architect that the bid package accurately reflects the initial project design.

Council Member Norman Amendt said he didn’t think the town was going to need the additional $1 million on the loan but that it was too early to look down the road and see how much the project would really cost.

Council Member Bill Wichmann emphasized that lack of information on concrete costs, saying it could be an entirely different discussion once those numbers were known. In the meantime, he said, the ordinance merely authorized borrowing up to $4 million.

Magill, however, remained cautious on the issue, questioning why the town would authorize a $4 million loan if it might turn out it couldn’t really afford the additional amount.

Roth, however, emphasized that the council would have to approve any bid for the project and could choose to reject anything it felt the town could not afford.

Meredith noted that the bid package would be out for bids by the time a scheduled second reading of the loan ordinance is held but that bids would not be back in before that point, limiting how useful the bids would be in making a decision on the ordinance. He again repeated the refrain that it allowed borrowing up to that amount, instead of mandating it.

“I just don’t see it right now,” Magill said of the town’s ability to afford a $4 million expenditure. “We don’t know how we’re going to pay for it.”

Resident Bill Olsen offered a potential compromise, in the form of a suggestion that cost-sharing on the police department with neighboring Millville be explored, since that town is also currently seeking to fund its own police department for the first time.

But Meredith noted that discussion had been held with Millville in the past and the idea of sharing police departments had been rejected by Ocean View’s neighbors to the west.

Amendt also cautioned that Ocean View itself still sometimes had too few officers to perform the duties needed — for instance, when multiple officers were involved in a call or needed to assist Delaware State Police, no one was left to patrol the town.

Police Chief Ken McLaughlin confirmed that Millville had found the numbers quoted by Ocean View for shared police protection, with two officers, to be unacceptable in previous discussions.
Magill said there were also bound to be problems when it came down to which of the officers were patrolling what locations and when, if resources were shared.

The focus remained on the $4 million loan for Ocean View alone, with no vote taking place on the first reading, as per normal procedure.