As the Redwood County Board continues to move forward with its plan to renovate the law enforcement center, discussions about how to finance the $4 million project led to a meeting with Terri Heaton, senior vice-president for Springsted, which is a public sector financial advisor the county has used in the past when it uses bonding dollars to fund capital projects.
One of the decisions the county needs to make is how much of its current reserves would be used and the amount it would want to fund with bonds.
Using the most recently audited information, Heaton told the board its undesignated reserves, which in 2001 were $3.2 million, could be used as a whole or in part to cover the costs of the project.
She added, however, that amount reflects what is the recommended reserve amount the county should have on hand for operational needs until taxes have come in to cover the county’s expenses.
Heaton proposed a mix of both reserves and bonding when she presented the concept during the county board meeting Tuesday morning, and presented a proposal that would include the use of $1 million of reserves, as well as $3.175 million in general obligation bonds for the proposed LEC project.
Heaton said the good news for the county is its credit rating is AA3, which is an increase over its credit rating the last time it did a project requiring bonds.
That, she said, means a lower interest rate, adding rates right now are very low making this a good time to be borrowing funds.
She also suggested doing a 15-year bond, which is also going to be more attractive to bond bidders, although the annual cost is going to be a bit more – based on her presentation the county would have a payment of approximately $250,000 annually.
Heaton said the county is in a very good position, adding its reserves are good and the lower overall debt level, combined with demonstrated fiscal re-sponsibility make it attractive to prospective bids.
She did raise some concern about the fact the county has held its levy flat for the past several years, as some bidders may be concerned about the potential for the county to make up with a high levy increase all in one year.
Commissioner Al Kok-esch said even though the levy has remained flat the county has continued to increase its reserves each year during that time.
Heaton also suggested the possibility of combining this project and the recycling center facility project into one bond, which she said could save the county money long term.
The board made no decisions regarding the bonding, as it is still in the process of determining whether or not it is going to move forward with the LEC project. That decision would not be made until after the board receives bids this spring.
Page 2 of 2 - In other action during its meeting, the county board:
• Accepted a $200 donation from Gloria Dei Lutheran Church for the circle sentencing program.
• Approved a lease agreement with Southwest Health and Human Ser-vices for $142,500.
• Accepted the resignations of Barb Stough from the auditor-treasurer’s office and Tanya Cook from the recorder’s office.