In a 3-1 vote, the Ashe County Board of Commissioners approved letting Ashe Medics amend its contract with the county, by using the property deed instead of a letter of credit, to ensure the contract obligations by the ambulance service will be fulfilled.
Commissioners Judy Porter Poe, Gerald Price and William Sands voted for the measure, while Commissioner Larry Rhodes voted against it. Board of Commissioners Chairman Gary Roark was not in attendance for the regularly-scheduled meeting on Monday, May 19.
“The main reason why I am here today is to talk about our letter of credit, which we have in place right now for $950,000,” said Craig Sullivan, owner of Ashe Medics. “That is one year’s term of the contract. We would like to seek the possibility of switching it and allowing the property to secure the contract.”
Sullivan said the property had recently been appraised at $1.3 million and that information had been forwarded to Patty Gambill, emergency management coordinator for Ashe County.
“There is over $1 million worth of positive equity in the property,” he said. “It would be a whole lot easier for us if we could switch that up.”
Commissioner William Sands then asked if Sullivan could explain his proposal in more detail.
“We currently owe $250,000 (on the building), and I have to have a performance bond or letter of credit in the amount of $950,000,” Sullivan said. “When you deduct the $250,000 from the $1.3 million it still leaves over $1 million in value of that property and that is what I would like to use in lieu of the letter of credit to secure the contract with the county.”
Sullivan said it would be a guarantee that Ashe Medics would fulfill the contract with the county, otherwise Ashe County would get the property.
“In all reality, from your standpoint, I would imagine the property would be more security to you than all the money in the world if something happens and we can’t fulfill the contract,” he said. “It’s my understanding that is how the contract is secured, as well from your current provider.”
Sands then asked the Board’s attorney, John Kilby, if the Board could legally make these changes to the contract.
“You can do this,” Kilby said. “We have in the past accepted property leans, and basically what you have here is the type of lean you would have with an open deed of trust.”
Kilby said with performance bonds the main question would be the cost of bringing in another contractor if the contract wasn’t fulfilled.
“As the year precedes, there’s less potential obligation,” he said. “My suggestion would be, if you’re going to do this, do it in the form of an open deed of trust, require Craig and possibly his wife to co-sign the note along with the corporation. If you do it in that matter, I feel like you’re fully protected.”
Commissioner Larry Rhodes then asked if the deed is based on the appraisal of the property or the market value.
“I guess you would like to think the appraisal is the market value, though you certainly can’t count on that,” Kilby said.
Kilby then asked Sullivan what the purchase price of the property was and Sullivan said he paid $750,000.
“That may be some indication of market value,” Kilby said. “By the same token, he may have gotten a great bargain for the property.”
Commissioner Gerald Price then suggested that Sullivan had plenty of money already invested with his vehicles, computers and other assets and would seem unlikely that he would not meet his contract obligations.
“My point was that I’m thinking Craig has enough invested in the overhead of that business that makes default unlikely,” he said.
Commissioner Rhodes expressed concern about changing a contract that had already been signed after accepting the Ashe Medics bid over Blue Ridge Medical Transport.
“These conditions are different than what was signed, dated and bid on back in December,” he said.
The Board of Commissioners will be taking a tour of the Ashe Medics facility on Monday, June 2.
In other action taken by the Board:
• Updated on the New River Canoe Race by Nancy Shannon
• Passed resolution providing limitation of tax rate in the Glendale Springs and Laurel Springs fire service districts.
• Received a monthly tax report from Keith Little, tax administrator.
• The next meeting will take place on Monday, June 2.
Wil Petty can be reached at (336) 846-7164 or on Twitter @WilPetty.