Summary of expansion funding
Cost estimates and repayment options have some people confused about bonding for expansion and improvements at the Ward County Courthouse.
In November, Ward County voters approved a ballot measure for a half-cent sales tax, not to exceed 10 years, for the Ward County office building, Ward County Jail expansion, and courthouse renovation projects. The money collected by that tax would not be used to directly fund the projects, but to pay off the up-front money needed to pay the bills. That up-front funding will come in the form of tax-revenue bonds.
“We have to get a loan, or up-front money, and so we do it in the form of a bond and these are what we call tax-revenue bonds, because the sales taxes are going to be levied,” explained county auditor and treasurer Devra Smestad. “The revenue from the sales tax is what pays off our bond on an annual basis.”
The plan presented to county commissioners at Tuesday’s meeting came to a total just above $39 million in bonds. There was some discussion among certain commissioners about the total, because when initial plans were laid out for the projects, certain things like architect fees and contingencies were not included in the total. The presented bonding plan took the rest of these sums into account to arrive at a number estimated to be the legitimate total for the projects, minus the infrastructure which will be bonded later.
This was one of several options for bonding the projects. One option was to bond the entire project, including infrastructure like roads, together to a full total for the complete project. That option was dismissed. Another was to bond half of the total for all projects now and then half at a later date. That option wasn’t considered. The final choice was to bond the funds needed for the building and planning and all monies associated with that, then bond the infrastructure funds. The reason for this choice was to not pay heavy interest on bonded funds not yet in use.
At Tuesday’s meeting commissioners Alan Walter and Shelly Weppler discussed the legitimacy of the total presented. Weppler deemed the total to be “roughly … in the ballpark” and Walter countered that a possible $2 million discrepancy can’t be considered within the ballpark. The discrepancy was a comparison to an earlier estimate that put costs at $41 million.
Commissioners will have until their second regular meeting in April, roughly one month’s time, to arrive at a final total for how much money will need to be bonded.
On a positive note, Myron Knutson, of Public Financial Management who advised the commissioners on their bonding options, had said in a March 5 meeting that if trends continue the bonds should be able to be paid off within seven years. That would mean that the sales tax could end before the 10-year maximum allowed by the ballot measure.