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Supervisors approve Industrial Development Authority proceedings for out-of-state Kilgore infrastructure bonds
Summary
The Board approved a resolution endorsing the Industrial Development Authorityof La Paz County to proceed with issuing capital appreciation bonds for a private industrial project in Chambers County, Texas; counsel said neither La Paz County nor the authority pledges repayment or full faith and credit.
The La Paz County Board of Supervisors approved Resolution No. 2025-10 to "approve the proceedings" of the Industrial Development Authority (IDA) of La Paz County related to an application to issue accelerated infrastructure financing bonds in support of a private industrial project in Chambers County, Texas.
Outside counsel Gary Drummond, representing the IDA, described the proposed financing as "accelerated infrastructure funding tax exempt and/or taxable revenue anticipation capital appreciation bonds" with an aggregate principal not to exceed $14,758,727 in accredited value. He said the proceeds would reimburse the Texas-based applicant (IDV Cogor LLC) for infrastructure already constructed and to pay issuance costs; the infrastructure includes water, sewer, drainage and road improvements.
Drummond emphasized that, under the structuring described, the security for the bonds is a reimbursement agreement with the local Texas improvement district, not revenues of the Arizona authority or La Paz County. "Neither the authority, the county of La Paz, or the state of Arizona is obligated to repay the bonds," he told supervisors, adding that "the full faith and credit of La Paz County is not pledged to the repayment of the bonds." He also stated the Arizona Attorney General had notified the IDA on April 17 that the project satisfies Arizona's statutory definition of a "project" permitting the IDA to act.
Supervisors asked clarifying questions about timing and how interest accrues. Counsel explained capital appreciation bonds accrue interest (no periodic interest payments) until maturity or until the Texas improvement district issues its bonds to retire the IDA bonds; the IDA will set aside a reserve from closing proceeds to cover the authority's annual fees for the first nine years.
The Board voted to approve the resolution; supervisors and counsel thanked the volunteer IDA board for its work. The staff report and counsel's statements note that approving the IDA proceedings does not obligate La Paz County financially and is an approval of the authority's recorded proceedings.
