Two weeks ago I reported that the county had decided to proceed with the expansion of Splash in the Boro, and had issued a request for loan proposals to several banks to procure funding for the project.
Given the state of the economy, you may or may not be surprised to learn that not a single financial institution contacted by the county responded with a loan proposal to finance the $4.2 million expansion. Bulloch County manager Tom Couch said 10 banks were contacted and not a one wanted to finance the construction when the request for proposal deadline arrived more than a week and a half ago.
In all fairness to those institutions, Bulloch County does have an excellent credit rating and Splash has an excellent revenue history, however, an augmentation of a recreational facility is not considered to be an "essential" need, and the banks chose not to bid for the financing of it when the proposal was initially issued.
This is not the end of the story. In fact, it is just the beginning of a four-day journey resulting in financing for the project being secured, and one bank feeling for lack of a better term, "unfairly left out."
According to Couch, when no proposals were received, Garrett Nevil, chairman of the Bulloch County Board of Commissioners, and he contacted officers in our local banks last Monday asking them to see what, if anything, they could do. This project is time sensitive in that it would have to be completed before next summer, so the clock was ticking and the decision had to be made to either move forward or shelve it for another year.
By Wednesday, Gary Johnson, vice president of the Sea Island Bank, had put together a loan proposal in which the Sea Island Bank, Farmers and Merchants Bank, and First Southern National Bank would all three participate in the loan to the county.
"The banks in Statesboro are all about supporting our community, therefore it made great sense for us to come together to assist with this project," Johnson said.
According to Jimmy Hodges, city president of BB&T in Statesboro, his bank was also working very hard to put together a proposal from BB&T to finance the project.
Couch said he encouraged BB&T to put a proposal in, acknowledging that another bid proposal was issued and a special meeting called to vote on it this past Thursday at 4 p.m. Hodges said, and Couch confirmed, that BB&T did submit a proposal at approximately 3 p.m. on Thursday, but the commissioners unanimously agreed that the proposal was submitted "too late" for consideration, and the tri-bank consortium loan proposal was accepted.Suffice it to say, Hodges was not happy and expressed his displeasure, stating that the "taxpayers were the ones being slighted as the BB&T proposal offered a lower interest rate resulting in a $375,000 difference over 15 years."
Couch said, "I acknowledge that John Lane and BB&T worked earnestly and diligently to try to put together a loan package as quickly as possible after no one responded to the initial request, but we had a proposal that was submitted in good faith and in a timely fashion, in which everyone knew, including BB&T, what the terms were. We had called a meeting specifically to vote on the only proposal that had been submitted at the time the meeting was called, and that is what the board did."
The very good news is that local banks are willing to work with one another and meet on common ground to serve the common good.
Hodges said, "We were contacted by the Sea Island bank to participate in their loan, but elected not to do so, as we felt our proposal was a better one."
"I am very disappointed in how the county managed the process, because they did not issue a specific deadline for the second round of proposals, and we were encouraged to present a proposal in a meeting that I had with the county manager on Thursday morning, the day of the called meeting" Hodges said. "And we did deliver our proposal, one hour prior to the meeting as the county manager knew that we were going to do. At no time was BB&T advised of a deadline other than the Thursday, 4 p.m. meeting. We submitted our proposal in good faith. The commissioners would not even consider our proposal."
Couch disagreed with Hodges's recap of the morning meeting.
"When I met Thursday morning, with Mr. Hodges and a representative from BB&T who came from North Carolina, I advised him if BB&T was prepared to submit a proposal, that I would pledge to present and report it to the commissioners at the meeting," Couch said. "However, that under the circumstances that I could not recommend it. The purpose of the meeting was to consider the bid submitted by Sea Island."
"This is not a banking issue, it is a taxpayer issue," Hodges said. "Ultimately, the taxpayers are the ones that are hurt as the proposal that they accepted will cost the taxpayers $375,000 more than the BB&T proposal. If our proposal were to be accepted, we would be happy for any other bank to participate in it with us."