Sevier County authorizes up to $10 million in bonds to finish court building financing
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Summary
The Sevier County Commission unanimously authorized issuance of up to $10 million in general obligation bonds to complete court-building financing; the county’s financial adviser said fees would not exceed 0.5% (~$50,000) and estimated market rates near 3.6%–3.75% for a 20-year issue.
On Nov. 18, 2024, the Sevier County Commission voted 20–0 (4 absent) to authorize issuance of general obligation bonds, series 2024, in an aggregate principal amount not to exceed $10,000,000 to help finance county court buildings.
The authorization, presented by financial adviser Joe Ayers, is intended to complete recent court-building financing that the county says totals about $35,000,000 in construction costs; the county is currently retiring roughly $10,000,000 per year on court-related debt, Chairman Larry Waters said. “This will be the last bonds issued for the courts buildings that have been done for the past few years,” Waters told the commission.
Ayers, whose firm works with the mayor’s office on bond transactions, answered commissioners’ questions about fees and market outlook. He said firm fees for this transaction “would not exceed one half of one percent,” which on a $10 million issue would be about $50,000. Ayers added that fees are not subject to competitive bid in this case and that the firm’s work with rating agencies can yield lower borrowing costs that offset fees. “We watch the market,” Ayers said, estimating a 20-year bond rate “in the neighborhood of 3.60%–3.75%” given recent sales and near-term market volatility.
Commissioner Bryan Delius pressed Ayers on how the firm’s fees are set and how the board can be assured the county gets fair-market value; Ayers reiterated the firm’s role in seeking the lowest all-in cost to the county, including rating-agency and counsel fees.
Chairman Waters also said the mayor’s office is evaluating whether to place the issue through a municipal bond pool managed by Cumberland Securities or to conduct a competitive public sale; staff and Cumberland Securities will complete an evaluation “by the end of the week” and recommend whether to proceed with a pool placement or a public sale. Commissioner G. Haggard moved to adopt the bond authorization; J. Parton seconded and the measure passed on a roll call vote of 20 Yes, 0 No, 4 Absent.
The authorization allows the county to proceed with steps necessary to offer the bonds to the market; the county has not yet announced the final sale method or exact pricing. Next procedural steps identified in the meeting included the mayor’s office and Cumberland Securities finalizing cost comparisons and bringing a recommendation back to the commission if a different sale approach is chosen.