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The future home of the city's Street Department at 395 Mud Lick Road. At its Nov. 5 meeting, council approved the financing for purchasing the $1.5 million property and will hold a public hearing on the matter at council's Nov. 19 meeting this week. / File photo by Katie Kuba

City, building commission to finance purchase of new Street Department headquarters

BUCKHANNON – At a meeting in early November, Buckhannon City Council approved on first reading an ordinance laying out financing for the City of Buckhannon’s acquisition of five-acre plot of land on Mud Lick Road that will serve as the new home to the city Street Department.

This week, at the beginning of council’s regularly scheduled meeting on Nov. 19, the city will host a public hearing on the financing for the property located at 395 Mud Lick Road. Then, council will consider the ordinance, which, if passed on second reading, authorizes the financing and purchase of the property from local businessman Mike Ross for $1.5 million.

In October, council voted to proceed with purchasing the former oil and gas company property from local businessman Mike Ross for the purpose of moving its Street Department to a newer, larger facility from the current one at the end of Factory Street.

The public hearing is slated to take place at 7 p.m. Thursday, Nov. 19, and provides an opportunity for the public to comment on the ordinance. At council’s Nov. 5 meeting, city attorney Tom O’Neill and special attorney Tom Aman with Steptoe & Johnson laid out the tenets of Ordinance 448.

O’Neill said the ordinance authorizes the following actions:

  • The City of Buckhannon’s Building Commission will acquire the real property at 395 Mud Lick Road as a public works facility, namely for the street and parks departments.
  • The building commission will then lease the property to the City of Buckhanon’s general fund, under which the Street Department operates.
  • The building commission will, in turn, sell and issue lease revenue bonds in an amount “not to exceed $1.6 million,” according to the ordinance.

According to the agreement, the city will pay Ross $1.5 million for the property with all equipment intact, and the closing date must take place prior to Dec. 31, 2020.

O’Neill explained the city’s general fund will lease the property from the building commission, and council will ‘sublease’ a portion of the property to the city’s Waste Board.

“That’s the basic structure of the transaction,” O’Neill told council.

Aman, the attorney with Steptoe and Johnson, explained that using the building commission to issue lease revenue bonds had been deemed legally permissible by the West Virginia Supreme Court of Appeals on several occasions.

“I would just reiterate that utilizing the building commission with the city being involved in annual appropriate lease agreement has been blessed by the West Virginia Supreme Court in a number of cases,” Aman told council via telephone. “You’re not violating the constitutional prohibition on occurring debt by a municipality, and that’s why you’re entering into it despite the structure.”

Aman said the city’s building commission would actually issue the bonds.

Councilman Jack Reger made a motion to approve Ordinance 448 on first reading, which was seconded by councilwoman Mary Albaugh prior to passing unanimously.

In October, Buckhannon City Council last week gave the greenlight to purchasing the fenced-in property on Mud Lick Road across from the city’s Waste Transfer Station and waste garage. The purchase will encompass three buildings, a welding crane and 44,000 square feet under roof.

According to the details of the agreement, the city will purchase the property from Ross for $1.5 million, and the transaction will allow the city to relocate its Street Department from the current location on Factory Street to the roomier Mud Lick location.

Smith International Inc., an oil field well and service business, previously occupied the property. Read more about the purchase here.

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