Cumberland Times-News

October 12, 2012

City acts to keep funding options open for razing former hospital

Ordinance permits pursuit of around $5.7 million in bonds through private sale

From Staff Reports
Cumberland Times-News

— CUMBERLAND — City leaders still aren’t sure which funding source they’ll use to pay for the demolition of Memorial Hospital, and they’ve taken additional steps to keep several options on the table.

On Tuesday night, the Cumberland City Council approved second and third readings of an ordinance that allows them to seek up to around $5.7 million in bonds through private sale to fund a number of infrastructure projects, including the hospital demolition, which is expected to cost around $3.5 million.

That’s to cover their bases in case the $5.25 million in bonds they’ve agreed to seek through the Maryland Local Governmental Infrastructure Financing Program can’t be used for a demolition.

A representative from the state financing program told city officials two weeks ago that was the case, sending Administrator Jeff Rhodes scrambling to find an alternative funding source.

Because bonds through the state program are slightly cheaper — and can be used to fund the other infrastructure projects, including street and water reservoir improvements — Mayor Brian Grim and council decided to approve two ordinances, allowing them to pursue bonds through both state and private sale. That means that, technically, they can borrow up to around $11 million.

But that’s not the intent, Rhodes reiterated on Friday.

“We plan to borrow $5 million,” Rhodes said, explaining that it’s not uncommon for municipalities to proceed in this way.

Once all the cards are dealt, officials here will determine how to finance the pro-jects, Rhodes said.

“We’re still in discussions with our bond financer as to which avenue is the best,” he said. “It’s $5 million we’re talking about. We’re just not sure how it’s going to be split up.”