Westminster Common Council voted 2-1 last night to approve a bond issue that would allow Montessori School of Westminster to construct a $1.2 million building on Hughes Shop Road, just north of city limits.
Council members Suzanne Albert and Kevin Dayhoff supported allowing the school to use the city's bond rating to take out a loan from Westminster Bank & Trust Co., saying the school met the criteria of adding to the welfare of area residents even though it would be outside city limits.
"The Montessori School of Westminster is the only nonchurch-related, private, nonprofit school in Carroll County," Albert said. She noted it has operated in the city for 25 years.
Dayhoff said he was initially skeptical, but spent a lot of time researching the matter and talking to state economic development officials.
"I'm comfortable with it," he said.
However, Councilman Edward S. Caldwell voted against the proposal, saying he got several calls and was approached by constituents on the street who opposed it. Caldwell said these constituents and he shared the concern that the new school would not be inside city limits, and would benefit only 19 families in Westminster.
Several residents of the neighborhood where the school would be built attended the public hearing on the issue two weeks ago. They said the school would add traffic to the dangerous Route 140 intersection, and could cause sewer and water problems.
Dayhoff said he was sensitive to those concerns, but that they were not a city issue. He said those matters rest with the county.
Council President Damian Halstad and Councilman Gregory Pecoraro abstained from voting on the matter because their children attend the school.
Some of the Hughes Shop Road residents asked whether their involvement with the school might pressure other council members into voting for the bond sale. But Dayhoff said Halstad and Pecoraro stayed out of the matter to the point of "ignoring" Dayhoff's questions.
City Attorney John B. Walsh Jr. said the law does not prevent Pecoraro and Halstad from voting on the matter.
The council's action does not give or lend money to the school, but allows it to seek a loan using the city's bond rating to get a low interest rate. Called economic development revenue bonds, they were created by Congress to give municipalities a tool to help manufacturers and nonprofit organizations.
The bonds allow these groups to get loans that provide the lender, in this case Westminster Bank, with tax-free interest income. The lender can pass those savings to the borrower in the form of low-interest payments, said Bill Jenne of Westminster Bank, who explained his company's role at the public hearing. He said the bank would assume all financial risk for the loan.
Walsh said the city's credit rating also would not be hurt should the school default on the loan.
Westminster has sponsored similar bond issues for Western Maryland College, Carroll Lutheran Village, a day care center and others, said Mayor Kenneth A. Yowan. He said the city gets one or two requests a year, and sometimes no requests. The city can sponsor bonds for up to $10 million, and each is decided on its merits. He said he never remembers one being turned down.
"When this particular request came up a couple of months ago, I thought, well, it qualifies," Yowan said.
"When I first looked at it, I thought it was a no-brainer," he said. "I think we're better off for having the Montessori School."
The project is awaiting approval from the county. It has had a development review hearing with the county, at which residents of Hughes Shop Road made their case and raised concerns about traffic, sewer, erosion and other potential problems. The final decision will rest with the Carroll County Planning and Zoning Commission.