The Downtown Smithfield Development Corporation (DSDC) admitted this week they failed to make two yearly payments to the Town of Smithfield. Instead of repaying the delinquent money when the missed payments were recently discovered, the executive director has asked the payments be forgiven.
In 2006, at the request of the DSDC, the Town of Smithfield borrowed $250,000 from the USDA to pay for Streetscape Improvements. The DSDC agreed to repay the Town the money over 30 years at a rate of 4.25 percent interest. Annual payments of $15,125 were made each year until 2012. That year, the organization asked for a waiver on the yearly payments in 2013, 2014, and 2015 so they could divert the money towards repairs at the Hastings House, a historic town-owned property the DSDC leases from the Town as their office space.
The council clearly agreed to waive the payment for 2013 only, according to the minutes of the June 11, 2012 meeting, but not in 2014 or 2015. However, the payments never resumed.
This week, Sarah Edwards, Executive Director of the DSDC told the board, “We’re asking for forgiveness,” for the $30,250 her organization failed to pay. Edwards said the DSDC did have the money to make the two payments but would like to use the funds for other purposes.
Councilman Perry Harris asked Edwards to provide an accounting of how the $250,000 was spent. “What was it spent on? If we are forgiving money I want to know how it was spent,” Harris said.
Board members agreed with Harris and voted unanimously to seek an accounting of the DSDC money before making any decision about waiving the missed payments.
In January 2016, the Town of Smithfield paid off the Streetscape loan to save $112,500 in interest expense, according to Finance Director Greg Siler. He said the council could lower the interest rate on the loan by two percent, which would save the DSDC about $3,000 per year. However 24 yearly payments still remain on the debt.
Edwards said if the council could waive the two payments they would have more money to spend on other items like additional fireworks during the 4th of July celebration.