Lincoln County commissioners held a required public hearing Dec. 23 and approved a resolution to issue tax-exempt refunding revenue bonds in an amount not to exceed $9,900,000 for the benefit of the University of South Sioux Falls. The board took the vote after receiving an explanation from bond counsel and hearing public questions.

Todd Meyer Henry, introduced in the audience as bond counsel, told the board federal law requires a governmental conduit issuer when 501(c)(3) entities — such as universities, hospitals or nursing homes — seek tax-exempt financing. "They're just acting as a conduit," Meyer Henry said, adding that the county pledges no taxing power and the issuance "does not count as debt" of the county. He said conduit issuance has been used previously in the area and that the county had acted in a similar role for other nonprofits.

During public comment, Sherry McKinney of Kent, S.D., asked whether the county would become liable if the university later failed and whether other 501(c)(3) organizations could seek similar conduit treatment. Meyer Henry replied that state statute authorizes cities and counties to serve as conduit issuers but that such financings are structured so they are not an obligation of the issuer and do not pledge county tax revenue.

After closing testimony the board moved and took a roll-call vote. The transcript records Commissioners Arons, Otten, Schmidt and Landy voting in favor and Commissioner Putnam voting no; the chair declared the motion carried.

The hearing record and staff packet also noted that the bonds will be issued in one or more series and that proceeds will be used to refund all or a portion of prior obligations that financed or refinanced educational facilities for the university. The county packet lists the matter as a required legal hearing before the board may adopt the resolution.

Next steps noted by county staff were procedural: finalize the resolution, complete statutory notice requirements and execute documents enabling the conduit refunding. The county did not adopt additional policy direction during the meeting.