Last issue’s story about the City Council approving the purchase of Morro Elementary School had some inaccuracies the City has asked us to correct. According to a letter from City Manager John Craig:
• The Council’s vote was not unanimous as reported; it was 4-1 with Councilwoman Cyndee Edwards voting “No.”
“Council member Edwards,” Craig’s letter said, “voted against the motion, citing several reasons for her dissent, including cost suitability and balance considerations identified in the due diligence report.”
• We reported that the City had not yet announced how it would pay for the purchase.
Craig said the City Council has the option of accepting a seller-financing offer from the school district to pay the remaining $4.8 million according to the following schedule: $0 due by Oct. 31, 2026, beyond the $500,000 deposit already made; paying another $500,000 by Oct. 31, 2027, with the rest ($4.3M) paid over time at a 2.0% interest rate; $2 million on the principle due Oct. 31,2028,8 with the remaining principle of $2.3 million due Oct. 31,2029,9 plus 2 years of accrued interest.
“The City Attorney,” Craig said, “is currently working with counsel for the SLCUSD to prepare formal documentation of these terms for Council consideration.”
• Craig said the cost of the due diligence report was $125,000 total, and the main consultant; EMBC Planning Solutions’ portion was 15% of that total. The rest went to other firms that were brought in on specific areas of the study. EBN reported EMBC’s contract was for $125,000.
• The depth of the due diligence study was reported as not digging too deeply into the condition, “which might typically include checking the building’s stability, structural strength, plumbing, electrical and mechanical systems, among other things.”
Craig said the due diligence report “included every one of the items listed.” And, “the inspection was not limited in the manner described.”
• We reported the report “considered a 0.5% interest rate if the City had to borrow money for the remodel.”
Craig said they received estimates from lenders of “interest rates of between 4% and 8%, leading to the staff report stating ‘5.0% annually over three years.’”
• We also reported that the finance director, at an August public meeting “appeared confident they could get $4.8 million out of emergency reserves without too much concern.”
Craig said financing options “are known and were discussed at the Aug. 25 meeting. The Finance Director does not believe using this level of reserves offers little concern. Using existing funds to cover the $4,8 million is not recommended. While drawing on reserves remains an option for the Council to consider, both City staff and Council flagged concerns about whether it would be a prudent use of the City’s reserves.”
We hope this clears up any confusion our story might have raised.
— Neil Farrell
