News

County enters into loan agreement

By Xiomara Levsen, The JOURNAL


 


The supervisors unanimously approved entering into a general obligation loan agreement to finance emergency services communication equipment at the meeting Tuesday morning.


The county cannot spend more than $10.5 million to purchase the emergency services communication equipment, board chairman Abe Miller said.


?And hopefully it will be less than that,? Miller added.


A decision of the length of the loan wasn?t decided by the supervisors Tuesday morning. They won?t know that until the Requests for Proposals (RFPs) from the bidding companies come in, supervisors Jack Seward Jr said. This also will tell the county how much they will need to borrow for the project.


?This resolution just outlines the authority up to and does not require to borrow that amount,? Seward added.


Before the resolution was approved, a public hearing was held about entering into the loan agreement.


Michael Hart, of Northland Securities, told the supervisors the loan agreement would only be for the equipment and not for a public building.


He also said the supervisors would need to decide the amount of the tax levy during their budget process for the next fiscal year before March 15.


?Obviously, we?re at a point in time we have some real general estimates on what this equipment, of what this is going to cost, but we don?t have a firm bid or firm understanding of what that is going to look like until we get later into the spring,? Hart said. ?We need to make a decision soon about whether or not we proceed forward with a tax levy on all property tax payers through the debt service levy portion of the budget. And if you want to proceed forward what is the right levy to make.?


Hart prepared eight-year, 10-year and 12-year financing options for the county to consider, he added.


The current debt services payments the county makes are $794,000 or 63 cents per $1,000 of property tax valuation, Hart said.


If the county goes with the eight-year structure the debt would be $1,713,000, increasing the property tax levy to $1.37 per $1,000 valuation, Hart said.


For a 10-year structure, the debt would be $1,415,000 with a tax levy payment of $1.13 per $1,000 of property tax valuation. For a 12-year structure, the debt would be $1,220,000, with a tax levy payment of 97 cents per $1,000 property tax valuation.


These are all combined with the current tax levy rate property owners pay.


There was some discussion about the interest payments. There is a considerable jump in the interest payment from the eight-year structure to the 10-year and 12-year structures.


?The interest payments that we referenced today whether it?s a eight-year, 10-year or 12-year, you said we don?t have to make a decision today,? Seward said. ?All we?re deciding today is if we?re going to need to borrow money for this radio system. The second thing is, are we capable of doing it and I think the answer to both of these questions is, ?Yes, we need to do it.? We need to replace our radios.?


The radios are past their life expectancy and a long-term bond debt is appropriate for an infrastructure project like this, he added.