County advisors outline $39 million bond plan and policy changes to fund jail, animal-control facility

Camden County commissioners heard detailed financing scenarios and policy recommendations July 1 from Davenport & Company as the county considers a new public safety complex (including the county jail) and a separate animal-control facility.

Courtney Rogers, senior vice president at Davenport & Company, and colleague Christopher Holt reviewed the county’s fiscal trends, fund-balance position and two borrowing scenarios they said would be appropriate if the county decides to issue long-term debt to pay for both projects.

The advisers told commissioners the estimated project cost is $53 million — roughly $50 million for the jail and $3 million for animal control — and that available SPLOST (special-purpose local-option sales tax) funds could reduce the amount that must be borrowed. Using $4 million earmarked from SPLOST 8 plus a potential $10 million from SPLOST 9, they modeled a likely bond issuance of about $39 million.

Why it matters: Davenport emphasized that the county’s recent growth in its tax digest and a multi-year pattern of surpluses have rebuilt reserves and positioned Camden to borrow at favorable rates if the board adopts stronger financial policies and pursues a credit rating.

Holt said the county “has operated a surplus and contribute[d] to fund balance every year,” and he described that trend as evidence of conservative fiscal management by county staff. Davenport recommended formalizing two debt policies: a debt-to-full-value cap of 1.75 percent and a debt-service-to-expenditures cap of 15 percent as targets that would be consistent with a double-A rating band used by some rating agencies.

Two borrowing paths: Davenport presented two amortization options for a hypothetical $39 million issuance at a conservative 5 percent planning rate. A 20-year amortization produces level annual debt service of about $3.0 million and total debt service of about $62.6 million; Davenport estimated that would require roughly a 1.35-mill increase (or equivalent savings from growth or cuts) to cover debt service. A 30-year schedule lowers annual payments to about $2.5 million but raises total debt service to about $76.2 million and produces an estimated 1.1-mill millage equivalent impact. On a median Camden house ($300,000), the advisers showed the monthly homeowner impact would be small — for example, a $200,000 house would see roughly a $10 monthly increase under the 20-year scenario.

Fund balance and credit: The presentation noted Camden’s unassigned fund balance has risen in recent years to about $17.5 million (roughly 40 percent of the annual budget) and that the county’s formal fund-balance policy is 25 percent. Davenport said improving or formalizing replenishment rules and tightening debt policies would help achieve and sustain a credit rating in the double-A range, which could reduce borrowing costs. Rogers said the county currently lacks a standing long-term rating because it carries no long-term bonds outstanding; Davenport pointed out a prior downgrade years ago tied to low reserves and said current reserve levels are much stronger.

Legal and structuring options: Davenport discussed methods of sale (direct bank loans vs. public market bonds) and bond vehicles. The advisers said certain issuing authorities constrain what can be financed without new enabling legislation. They told commissioners that an intergovernmental authority (created through the Georgia General Assembly) or issuing “GO bonds” via referendum are common paths. They also advised the board that creating a new third-party authority that exists only to issue debt could be done in time for next year’s contemplated issuance but would require legislative approval.

Board discussion and next steps: Commissioners asked staff and bond counsel to clarify whether the existing Public Service Authority (PSA) has legal authority to finance an animal-control facility. Commissioner Smith requested a written opinion from bond counsel on that point. No formal borrowing motion or vote was taken; Davenport recommended that the board adopt updated fund-balance, debt-management and investment policies and directed staff to return with draft policy language and additional legal analysis on the PSA and other issuing options.

What’s next: Davenport said the county could pursue a formal rating and a public-market sale if the board moves forward, and the advisers recommended working with staff over the coming months to finalize policy changes and any enabling legislation before issuing bonds in the fall of the following year.