The DeKalb County Board is about to go $45 million in debt to finance an expansion of the courthouse and to build a new county jail. As required by law the Board held a public hearing (March 10, 2010) on the issuance of the debt bonds.
At its October 2009 Finance Committee meeting, Kevin Hoeckler from Scott Balice and Associates, presented a plan for selling the $45 million in debt bonds “without a referendum or raising property taxes.”
The plan includes use of low interest or rebateable Build America Bonds and Recovery Zone Bonds and, according to Hoeckler, will be repaid through:
- The County has unobligated Sales Tax Revenues of around $1.2 million annually from the County Farm Site (East of Sycamore Road).
- Given the current market and certain credit assumptions this revenue stream can accommodate a $14 million bond issuance.
- This money can be used by the County to pay for the Court House expansion which is estimated to cost between $10-$12 million.
- The County is working with Waste Management to enter into a contract starting in December of 2012 that will produce roughly $120 million for the County over 30 years.
- Given the current market and certain credit assumptions this revenue stream can accommodate a bond issuance in excess of the $30 million estimated project costs for the Jail expansion.
The Gatheratorium at the County Legislative Center was full for the public hearing but only about 10 citizens spoke. All except Judge Kurt Klein spoke against selling the bonds or the construction project altogether.
Video Comments from Public Hearing
- Judge Kurt Klein
- Josh Boies (Part One and Part Two)
- Matt Woodstrup
- Peter Barick
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3 Comments
Mac – I have RE-uploaded the videos with enhanced (louder) audio:
Matt Woodstrup: http://www.youtube.com/watch?v=C6TPrAV7Juo
Judge Klein: http://www.youtube.com/watch?v=moLphY8j54Y
Peter Barick: http://www.youtube.com/watch?v=XGbfdUZoheg
Josh Boies Pt 1: http://www.youtube.com/watch?v=T9P9jhE3yn8
Josh Boies Pt 2: http://www.youtube.com/watch?v=Aq5v_poSKec
Isn't it funny how the costs for the courthouse and jail match up exactly to the expected revenues.
I wonder what the projects would cost if the revenue projections were twice as much.
How much are projections themselves worth nowadays? Haven't they been wrong a lot for the last few years? I know the city's have been.
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During the public hearing I used my 3 minutes to remind the Board that General Obligation (GO) Bonds are backed or guaranteed by the taxpayers through the property tax levy. If for any reason projections for stated alternative revenue sources (sales tax and landfill tipping fees) fail to materialize or fall flat then property taxes must be raised, or services cut, to meet the debt payments.
After the meeting I had a brief conversation with Ray Bockman. He acknowledged that my point was valid but feels strongly that the low interest rates and competitive construction bidding are a combination too good to pass up. He'd borrow much more if he could. He'll also be retired in a few years.
Interest rates are low. No question about it. But I'm not seeing any real savings for taxpayers in the construction bidding. There are much sharper pencils out there but the government's, "if we don't spend it we lose it" mentality eliminates any possibility of said savings. Whatever the authorized amount is its spent. No cost savings. Just more addons.
I think there is a good chance the revenue projections the County is using will be off. Sales tax revenue has been plummeting for a year or two now. That's what they're hedging the courthouse project with.
I don't think the courts are going to look favorably on spending tipping fees before the matter of the landfill expansion has been approved.
I do understand there's an opportunity for someone to take over the synthetic ice rink but I don't think those revenues will cover much… in other words… the taxpayers, reluctant co-signers, are in for a rough road should the County proceed as planned.