Liberty County authorizes up to $110 million in certificates of obligation for new jail; bonds sold at about 4.63%

The Liberty County commissioners court authorized the issuance and sale of certificates of obligation not to exceed $110,000,000 to finance construction and land acquisition for a new county jail.

James Gilley of US Capital Advisors presented results of a competitive sale, reporting six bids and an effective purchase interest rate of about 4.63% from Wells Fargo. “As of the deadline…we've received total six bids. The best bid…went to Wells Fargo Bank…with an interest rate at a purchase cost of 4.630007%,” Gilley said.

Gilley told the court the county actually received purchase proceeds at a net premium, yielding roughly $109.74 million of principal to repay and projected annual combined principal-and-interest debt service of about $6.9 million per fiscal year. He also noted the county’s improved credit profile and the competitive nature of the sale.

Commissioners asked whether the authorized amount would be sufficient amid recent construction-cost volatility; staff said the architect’s estimate was about $100 million and the $110 million authorization provides a contingency cushion. The court described plans to use a construction-manager-at-risk contract and to deposit proceeds in an escrow account to earn interest while funds are spent.

After discussion, the court voted to approve the order authorizing issuance and sale of certificates of obligation and to proceed with closing the financing. The court and staff said they will continue the CMAR selection and project-cost validation work before construction starts.

Next steps include finalizing CMAR negotiations and closing the bond sale. The court was briefed on the timing of the first interest payment and the county’s intention to place proceeds in escrow to manage cash flow and earn interest.