City taxpayers came out $34,728 ahead by the city’s decision offer a discount on the refund Dell owed the city in exchange for early payment.
Dell originally was scheduled to refund on Feb. 1 the $15,556,071 that it received in city incentives to build its computer assembly plant in Forsyth County. In October, the city offered to reduce the refund at an annual rate of 1 percent if Dell refunded the money ahead of schedule. Dell accepted that offer and refunded $15,517,246 on Nov. 2.
The city invested the refund in federally guaranteed agency bonds. Clark Case, the city treasurer, reported last week that the city earned $73,553.56 in interest and market value appreciate on the bonds from Nov. 2 through Feb. 1 - $34,728.11 more than the $38,825.45 the city gave up when it accepted the early refund.
Mayor Allen Joines said the investment return demonstrates the wisdom of taking the early payment to eliminate any possibility of the community not getting reimbursed.
"The city has not only benefitted by having Dell make the payment, but also has received over $34,800 more than it would have, if it had waited until February to receive the payment as set forth in our contract with Dell," Joines said.
"In fact, the city will be even further ahead because Dell has extended the date it will cease operations to April 30. Under the original contract the city would not have received payment from Dell until June. Therefore, the city should gain another $90,000 in earnings."
Chief Financial Officer Denise Bell said the city will continue to invest the money for the best possible, safe income until the funds are used.