BELMONT, N.C. — Another Charlotte suburb is seemingly putting the cart before the horse when it comes to funding a major development project.
The city of Belmont has spent more than $8 million on the construction of its long-awaited recreation center before securing the necessary loan for the roughly $13.5 million project.
An irresponsible decision?
"I think it's really irresponsible," City Councilmember Marc Seelinger said. "It's really mindblowing that (city staff) thought this was OK, because you wouldn't build a house like this. You wouldn't build a home before getting a loan. It's just a recipe for driving yourself into the ditch."
The new recreation center is already 70% built even though Belmont can't apply for the needed $12 million loan until early next year. Construction should almost be complete by the time Belmont secures the loan.
The state won't approve financing for the project until the city completes long overdue routine audits. Management blames staff turnover as the reason for delays in finishing those audits.
"If this were your money, you wouldn't do it this way. Am I right?" WCNC Charlotte asked City Manager Adrian Miller.
"We now have a year-and-a-half of hindsight and we would not have done this had we known it would have taken this long to complete our audits," Miller said. "The good news is we're in a strong financial position and we're able to do this."
Miller said the staff didn't want to delay the project and risk a cost increase, so instead of waiting for a loan, they decided to dip into the city's general fund to bankroll the project.
"In order to lock in the pricing at 2021 prices to get this project started that was the risk that we were willing to take," he said.
The $8 million spent so far is the equivalent of nearly half of Belmont's $18.4 million annual budget. The plan is to reimburse the city’s bank account once the loan comes through.
Lost in translation
Miller pointed to a council-approved ordinance that he said gave management the green light to make payments ahead of time.
"(Council) never said you can spend up to so much," Miller added.
Seelinger and other city leaders have said the ordinance wasn't intended to be a blank check.
"We had not really ever talked about going full steam ahead with this project to the point of spending $8 million on it," Seelinger said. "We as a council put a lot of trust in our staff to manage these projects responsibly and I feel like, in this case, that trust was misplaced."
Seelinger isn't the only council member left in disbelief.
At a September meeting, Council member Alex Szucs said he was shocked at how much the city had already spent on the project.
"We are rolling the dice and risking taxpayer funds right now. I'm sorry. That's where I'm going to go," Szucs said. " ... Now we're jeopardizing taxpayer funds."
Council member Richard Turner echoed that sentiment at the same meeting.
"In a nutshell, we're gambling with other people's money," Turner said. "I mean this is the taxpayers' money that's coming to us to be good stewards of, and we're kind of rolling the dice."
Miller admitted the city's approach is unusual and comes with some risk, but said he doesn't think the decision will backfire on taxpayers. He is confident the loan will eventually cover what the city has already spent and the millions more Belmont will spend in the coming months to bridge the gap.
"There's always the risk of the unknown and my crystal ball is broken, so I can't say what's going to happen in the future," Miller said. "We don't have any concerns as staff that we're not going to be able to get, a) approval for the loan and b) interested lenders."
A lesson in Rock Hill
A short drive to nearby Rock Hill reveals what it looks like when best-laid plans go wrong. Leaders there committed to helping with the Carolina Panthers practice facility but never secured the needed $225 million in bonds. That failure played a role in the facility’s demise.
Adam Andrzejewski is CEO of Open The Books, a nonprofit that tracks government spending. He encourages governments to use taxpayer dollars wisely. He can't help but question a city that spent nearly half of its operating budget covering a project that's still awaiting financing.
"It's very easy to spend other people's money," Andrzejewski said. "Somebody needs to be held accountable. If you fail to plan, you plan to fail."
WCNC Charlotte is always asking "where's the money?" If you need help, reach out to WCNC Charlotte by emailing money@wcnc.com.
Full speed ahead
Back in Belmont, despite talk of halting construction, council members have not hit pause on the recreation center project, afraid it would cost taxpayers more to stop and start. Management assured them there's enough of a cushion in city coffers to account for the unknown in the near future.
"We can't change what's happened in the past," Miller said. “We're working on the solution."
At the council's request, the city attorney reviewed the entire process and assured leaders he was "satisfied everything's legal." Still, council members have acknowledged they are ultimately responsible for financial oversight. They have also indicated the city will likely pay more in interest due to the audit delays.
In addition to the eventual $12 million loan, Belmont is relying on $1.5 million from the state of North Carolina to cover the cost of the project.
City manager resigns
Miller, who's managed the city for the last six years, announced his impending departure earlier this month. He is leaving the city in December to "begin a new chapter" as an assistant city manager for the city of Gastonia, according to his resignation letter.
"It has been a pleasure working with you, the city council, and the great team of professionals that we have built," he wrote. "I am proud of improvements to our community that we have made, such as Ebb Gantt Park, Kevin Loftin Riverfront Park, the Stowe Park renovations, and the soon-to-be-completed Belmont recreation center. The investment in our streets, utility infrastructure, and Main Street program have added to the quality of life for our residents, and they have shown to improve our local economy."
Contact Nate Morabito at nmorabito@wcnc.com and follow him on Facebook, Twitter and Instagram.