Beltrami County signals support to pursue $36 million second bond and shorter term for jail project

Beltrami County commissioners on the evening’s agenda directed staff to prepare documents for a second bond issuance to fund the remaining construction of the county jail, following a detailed presentation on project costs and financing options.

Administrator Barry told the board the project has a guaranteed maximum construction price of about $62,500,000, owner items budgeted at roughly $8,600,000 and an existing-jail facility estimate near $6,000,000, producing an overall not-to-exceed project budget near $80,000,000. He said the county previously issued a $40 million bond in 2024 and has been operating on that issuance while monitoring spend rates and construction schedules.

Barry recommended reducing the planned second issuance from $40 million to $36 million by applying about $4 million of available bond-fund proceeds and shortening the term from 25 years to 20 years. He said that approach — combined with conservative local-option sales-tax revenue assumptions — would still produce roughly a $250,000 annual cushion in the model and could save taxpayers roughly $12,000,000 in interest over the life of the bonds by lowering the principal and shortening the term.

Bruce Kimmel of Ehlers, the county’s financial advisor, said the proposed structure funds about $36,000,000 of construction costs and that bond-sale mechanics (including an anticipated underwriter premium) could reduce the actual bond amount to about $35.5 million in practice. Kimmel presented debt-service projections that show average annual debt service of about $2,627,000 over a 20-year term under conservative revenue assumptions.

Commissioner Carlson cautioned that the local option sales tax is legally restricted to the jail project and "is not money that can be used for levy dollars," reminding the board that retiring the sales tax early does not create discretionary levy relief. Commissioner Gould asked whether a slightly larger issuance (for example, $37 million) would materially change the risk profile; staff and the finance consultant said they had modeled cushions — including interest earned on invested proceeds and remaining unspent bond proceeds — and concluded that $36 million is a viable and prudent recommendation.

Barry asked for a directional "thumbs-up" to move forward; the board indicated consensus and staff said they would prepare the necessary resolutions and bring them back for formal action at a subsequent meeting.

Next steps: staff and bond counsel will prepare resolutions and sale documents for board consideration at the next meeting. The board did not take a formal binding vote to adopt the financing plan on the night of the presentation; rather, it authorized staff to draft and return with the recommended documents.