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County hears plan for up to $12 million bond to renovate courthouse
Summary
Municipal adviser Greg Yaritas presented a financing plan for a proposed courthouse renovation with a not-to-exceed bond amount of $12,000,500 and estimated project cost about $12.3 million; commissioners were advised to choose a 15- or 20-year term before the county council resolution is finalized.
Greg Yaritas, a municipal adviser with Financial Solutions Group, presented the county's financing analysis for a proposed courthouse renovation, saying "the bond amount that we're talking about is 12,000,500," and that the project itself is estimated at roughly $12.3 million. Yaritas told commissioners the analysis includes both 15- and 20-year amortization options and showed estimated annual debt payments of about $1,000,000 under either scenario.
Yaritas said property taxes are written in the lease agreement as the primary source of lease rental payments, but the county can supplement with other revenues to reduce annual lease rental payments. "You also have the option to put any other revenues available to the county to put in a supplement or reduce the annual lease rental payment," he said.
Commissioners pressed for clarity on timing and sizing. Yaritas recommended deciding on the term length (15 or 20 years) prior to the county council approving its resolution so the council's resolution can include the selected option. He warned that large changes in the final bond amount should be known before the bond sale: the official statement used in the sale is marked "subject to change," but substantial differences should be resolved beforehand to obtain the best market outcome.
He explained market mechanics for bonds sold at a premium, noting that if bonds sell above par the county can apply premium proceeds either to the project or to the first lease rental payment to keep tax rates lower. He also stressed the need for appropriate insurance coverage and that standard lease provisions (option to purchase, renewals) are customary and would be filled in when the bonds are sized.
The board discussed potential annual supplemental contributions to the debt payment (Yaritas described a range from $0 to $1,000,000 as possibilities depending on county budget choices) and whether existing annual courthouse repair funds could be applied as part of the financing plan. Commissioners were told execution of the lease would follow bond sizing and that the board would execute the resolution rather than the final lease document at this meeting.
The presentation concluded with commissioners acknowledging the need to finalize the term and certain numbers before moving to the bond sale and before the county council acts.
