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Print Town votes to seek $1.2 million loan for library
Written by Mark Lineberger   
Wednesday, 08 September 2010 00:00

The Town of Camp Verde is going after a loan from the U.S. Department of Agriculture Rural Development agency in hopes of getting funding to help build a new library.

Josie and Bill Roberts, visitors to the Verde Valley from Florida, use the Camp Verde Community Library’s wireless Internet connection outside the building Sept. 1. The Camp Verde Town Council voted 5-2 later that evening to approve the start of an application process for a  $1.2 million grant for the town’s library initiatives from the U.S. Department of Agriculture’s Rural Development agency.The Town Council voted 5-2 last week in favor of seeking a $1.2 million loan, but the move was more of a matter of getting a place in line for federal dollars.

The town has talked about building a new library for years, but recently it just hasn’t had the money to practically consider such a project.

The council voted in March against the project, because it didn’t have the cash to make the payments on a loan. It still doesn’t, but if a voter-initiated proposal to increase the sales tax on the ballot passes in November, things could change.

Part of the decision depends on the Citizens’ Library and Park Construction Sales Tax Initiative, a group that was organized in part by local residents Jim Ash and former Town Councilman Charlie German. The group turned in more than enough signatures this year to get the question put on the November ballot.

If that measure passes voter approval in the fall, part of the revenue generated would go toward a new library.

Plans for a library have already been drawn up and a nonprofit group has been working to raise money to cover the multi-million dollar price tag. The rest of the money would go toward the park. The town purchased 118 acres of land from the U.S. Forest Service a couple of years ago, and hired a consulting firm to work with the public in drawing up plans for future development.

The Citizens Committee for the Camp Verde Library, or CCCVL, a nonprofit corporation formed with the sole purpose of raising funds for construction, came up with a construction plan that could cost $3.2 million for a new library.

Several council members expressed concern last week about signing the town up for a loan they weren’t sure they could pay off if the sales tax initiative fails.

Linda Harkness, head of CCCVL, said she felt as if she had misled the council in March.

The nonprofit group has more than $700,000 in assets, and if necessary, could improve the current library built four decades ago. But the group would like to see a new building, and argues that while they have the money, the community deserves a bigger project.

Still, the Town Council was hesitant.

“My objection is that we’re trying to spend money we don’t have,” Councilwoman Robin Whatley said.
Harkness and U.S. Department of Agriculture representative Leonard Gradillas pointed out that even if the town were approved for a loan, it wouldn’t have to accept the entire amount.

If the cost of the library turned out to be less, Gradillas said the town didn’t have to pay off as much as it originally applied for.

The loan numbers Gradillas was talking about were for a 40-year loan, something Councilwoman Norma Garrison said she wasn’t prepared to sign on to because of the potential debt to the cash-strapped town. Preliminary numbers gave a figure of around $35,000 per million borrowed for the next 40 years. Gradillas said that the federal government could delay payment on the first installment payment by three years at the most, but that would result in more expensive payments for the life of the loan.

If the loan is approved, however, the town may be eligible for grant money that could help pay off the loan. It’s a chicken and egg situation for the town, a government that doesn’t want to commit to something before the cash is available.

In the end, the town agreed with a compromise that it would apply for $1.2 million, the thinking being that CCCVL has some cash on hand, cash that could serve as backing for the loan. Despite arguments about how much money the town might have if the tax measure passes in November, some council members wanted to wait.

CCCVL could put itself up as a principal backer, but it would have to commit to a smaller project without town support. If an investor agrees to fund the community, it would be ideal if a new library could be built.

Gradillas said that if the town had submitted an application for federal dollars earlier, it may have been eligible for federal stimulus dollars. As it is, the library project is back on a first-come, first-serve basis. Gradillas said libraries had been made a priority by the head of the USDA and they might find a better chance of being funded.

The fiscal year for the federal government starts Friday, Oct. 1, when the funding cycle will restart.
The plan passed, though Mayor Bob Burnside requested more exact numbers about how much this would cost.

Burnside was opposed to voting for random expenses, and requested that new Town Manager Russ Martin have some time to work out something with the parties involved.

Council members Bob Kovacovich and Norma Garrison voted against any attempt at funding the library because, in at least one recorded case, they wanted to find out the results of the November tax vote first. Garrison was adamant about not signing the town on to a 40-year debt. In the end, the first-come, first-serve attitude perpetuated by the federal funding officials was predominant.

Burnside wanted the town to draw up some plans and figure exactly how much was going to be spent, and that was done immediately. If the town gets the loan, it may be eligible for a grant to help pay for it.