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Committee authorizes county pledge as backup for up to $16.25 million in Knaps Corner drain bonds
Summary
The drain commissioner asked the committee to authorize pledging the county's limited tax full faith and credit as backup security for up to $16,254,000 in Knaps Corner drain district bonds to finance maintenance and improvements; staff explained assessments and the typical bond benefits, commissioners asked about property acquisitions and alternative financing, and the committee approved the authorization.
The Finance & Infrastructure Committee recommended that the Board of Commissioners authorize pledging the county's limited tax full faith and credit as backup security for issuance of Knaps Corner drain district (also referred to in the packet as Naps Corner/Knaps Corner) bond series 2026 in an amount not to exceed $16,254,000.
Staff explained that proceedings were taken pursuant to a petition filed with the Drain Commissioner and that the drainage board will issue bonds under Chapter 20 of Act 40 (Public Acts of Michigan, 1956, as amended) to finance maintenance and improvement work for the Knaps Corner project. Principal and interest on the bonds will be payable from assessments to be made on the City of Grand Rapids, per the final order of apportionment, and the county's limited tax pledge is intended to reduce interest costs. Bond counsel has reviewed documents and staff anticipated closing in May 2026.
Commissioners asked whether alternatives to bonds—such as private equity—might be available; staff explained municipal tax‑exempt bonds are very difficult to beat in cost and that private equity investors typically expect higher returns. The Drain Commissioner described two property acquisitions required to connect the drain to the Grand River and explained the county purchased one abandoned property to secure an easement and staging area; the county intends to resell that parcel after construction. The committee approved the authorization by voice vote.
