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Commission approves $1 million interfund loan to buy Pebble Beach site for future fire station
Summary
The board authorized a $1,000,000 interfund loan from an unrestricted portion of the future beach nourishment fund to acquire a 2‑acre Coast Guard Road parcel intended for a future fire station and approved a corresponding general fund budget amendment; staff said interest would remain in town and repayments are expected over five years tied to fund earnings.
The Board of Commissioners authorized an internal $1,000,000 loan to acquire a 2‑acre parcel on Coast Guard Road intended for a future western fire station and approved a related general fund budget amendment.
Laura (speaker 14) told the board the town previously approved the acquisition at $1,300,000 and staff recommended using an unrestricted portion of the future beach nourishment fund for a short‑term interfund loan rather than traditional bank financing. "The advantage is doing it in a 5‑year term as opposed to a 10‑ to 15‑year term," Laura said, noting interest paid stays within town funds.
Laura said the future beach nourishment fund holds about $9.5 million in reserves overall but that much of the fund is restricted. She said the portion originally transferred from the general fund is unrestricted and available for a short‑term loan. The proposed loan would carry a variable interest rate tied to the fund's investment earnings; staff quoted the fund's current earning rate around 3.62%.
Staff presented a payment estimate with an initial annual payment near $225,000 and identified $305,000 in current‑year funds (excess property taxes, sales tax receipts and departmental cost savings) to cover near‑term needs. Laura cautioned a caveat: because of governmental fund accounting and pending FEMA reimbursements, the town's reported fund balance could be affected at fiscal year end.
Frank Rush (speaker 10) and others said they had consulted the Local Government Commission and still considered the internal loan a prudent option that keeps interest payments inside municipal accounts and avoids additional bank closing costs. The board opened and closed a public hearing before voting to adopt the interfund loan resolution and the budget amendment.
Commissioners discussed risks if a catastrophic weather event required immediate beach nourishment funds; staff said options would include bank financing or state revolving loans to bridge temporary shortfalls. The motions to adopt the interfund loan and the budget amendment passed on voice votes.
