What’s the best way to pay $6M?
Members of the county’s Budget and Finance Committee plan to reconsider two different methods of financing a potential $6 million jail facility tomorrow just before the full County Commission meets.
Commissioners approved a plan to finance construction with a 20-year “straight debt” proposed by Commissioner George Smartt earlier this week, but committee members said two other members were not present and they would like to give them another chance to consider the options.
The other financing option is promoted by committee Chairman Swanson Bennett, who said a 20-year “wrap-around debt” plan would mean the county would pay only interest on the jail until the school debt expires. That debt expires completely in 2013 and if the $30 per vehicle wheel tax is extended beyond that time, the new jail would not necessarily require a property tax increase, Bennett said.
Under the 20-year straight debt financing, the jail would cost $9.46 million. Under the wrapping financing plan, the jail is expected to cost $10.9 million. Although more expensive in the long run, Bennett said the wrapping plan gives the county room to “breathe” in case other needs arise.
“The interest rates are low and the wrap around gives us a lot more breathing room but does not necessarily mean we would have to wait and pay off late,” he said, noting the wrap around could be paid off early. “That would be my strong reasoning there to go ahead with the wrap around instead of the straight indebtedness.”
Director of Accounts Linda Hillis, who was asked to attend, agreed.
“If we go to the straight debt, then it is going to require a tax increase if we want to have any room in there for future projects and we never know when we may have to do some future projects,” she said. “The wrap scenario gives us a little room there to do some future projects and also in the year 2013 we would have an option of paying an additional amount of principal on the bond, therefore, still saving some of the interest.”
Smartt’s motion was seconded by Commissioner Wayne Pryor, which Bennett required before discussion about financing scenarios took place. The three voted on the issue, with Bennett disagreeing, but the three noted they plan to meet tomorrow at 6:30 p.m. to take another look at the issue.