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County’s $35 million courthouse remodel and bond options outlined in fiscal study session
Summary
Financial advisers presented debt scenarios for a proposed $35 million remodel of state-transferred courthouse buildings; analysts said Kings County could absorb the debt without a major downgrade but cautioned about pension liabilities and budget trade-offs.
Kings County leaders received a study-session presentation on April 1 that outlined financing options for a proposed $35 million remodel of three state-transferred courthouse buildings the county received after the state opened a new courthouse.
David Leifer of K&N Public Finance, the county’s municipal advisor, presented pro forma debt-service schedules for 20-, 25- and 30-year lease revenue bond scenarios and explained how those choices affect annual payments, total interest and credit metrics used by rating agencies.
Leifer said a typical 20-year, fixed-rate issuance for $35 million would carry higher annual debt service but lower total interest costs; a 30-year structure would reduce annual pressure on the general fund but increase lifetime interest. Leifer used conservative assumptions, including possible capitalized interest if the county pledges the project itself and cannot pledge an existing asset during construction.
"We're right about where rates have been for the last 25 years," Leifer said, noting market volatility and that tax-exempt municipal borrowing remains available. He concluded that Kings County’s current low debt burden — helped by retirement of prior pension bonds — would likely allow the county to maintain its current credit profile for the proposed borrowing under the scenarios shown.
Leifer cautioned the Board to monitor pension and OPEB liabilities; he said increases in those obligations could affect credit scoring. He recommended continuing strong budgetary discipline, maintaining reserves and developing a capital improvement plan.
County staff said design funding for the remodeling already exists in the budget and that construction borrowing would follow if the Board elects to move forward. Public Health Director Rosemary Rand said the department was displaced by a fire in April 2024, is paying short-term lease costs and expects long-term savings by moving into renovated county-owned space.
Supervisors asked about state funding options and earmarks; staff said state earmarks are possible but competitive and that the county is pursuing a multi-pronged approach including bond finance and targeted lobbying.
The presentation was informational only; the Board took no financing action at the meeting. Staff and the municipal advisor were asked to return with refined cost and schedule figures and options for bundling county capital priorities into a coordinated financing plan.
