During a Fayetteville Public Works Commission meeting on Wednesday, Feb. 22 City Councilman Deno Hondros asked the utility board to forgive repayment of $4 million that PWC loaned to the city in 2020.
Hondros, who is also the City Council’s liaison to PWC, clarified in an interview after the meeting that he was speaking for himself and not representing the city or the City Council as a whole.
The loan was intended to help the city through the economic struggles of the COVID-19 pandemic.
Last month, PWC Chief Financial Officer Rhonda Haskins wrote to city Chief Financial Officer Jody Picarella asking the city to “promptly repay the $4 million to PWC.”
According to the initial written loan agreement, the city would have to repay PWC’s loan if it received pandemic relief funds from another source. Fayetteville has received more than $40 million from the American Rescue Plan Act, federal legislation enacted in March 2021 that sent money to state and local governments as a way to help recovery from the pandemic.
Hondros asked that PWC rescind this part of the agreement.
“My ask,” Hondros said at Wednesday’s meeting “is to rescind the ask or to reconsider the ask of the repayment of that.”
Hondros argued that the city and PWC’s money all comes from Fayetteville taxpayers.
“At the end of the day, it’s the same pot of money — whether the county raises taxes, whether PWC raises rates or whether the city raises taxes,” Hondros said.
After Hondros’ request, PWC Treasurer Wade Fowler said that under the PWC charter, the $4 million, if not repaid by the city, may be considered an impermissible transfer.
PWC spokeswoman Carolyn Justice-Hinson, in an email, echoed Fowler’s comments. She said the loan was made in compliance with the charter.
“That is a factor that will affect whether consideration can be given to the request,” Justice-Hinson said.
Fowler said during the meeting that it may be possible to extend the date for repayment.
In March 2020, Mayor Mitch Colvin declared a state of emergency because of COVID-19. That April, the mayor requested relief funds from PWC to help address the city’s hardships in addressing the pandemic.
Typically, PWC’s charter does not allow additional transfers of cash from PWC to the city, but a state of emergency order, along with a written agreement between the parties, allows for an exception. Colvin requested the money under this exception in the charter.
The city and PWC agreed to terms of the loan that May on the condition it be repaid.
Hondros said at the meeting that he was requesting forgiveness of the repayment in an effort to build a partnership with PWC.
“I think it will show a good-faith effort on PWC’s part,” Hondros said.
PWC Chairwoman Ronna Garrett thanked Hondros for his request.
“It takes a lot of courage to come before the board to ask for something like that, so thank you for your courage and representation,” Garrett said. “I appreciate the courage and the transparency and the intent to partner and break down silos. We, too, have the same goals and vision.”