Carlton County officials moved another step forward in their financing plan for the proposed justice center, with the board of commissioners approving an intent to bond at their Tuesday, Nov. 9. meeting.
The option the board went with was bonding for $10 million this year and $50 million in early 2022. The estimated annual maximum debt service on the bonds is $3.07 million, over 30 years.
Kevin DeVriendt, county auditor and treasurer, presented the plan to the board and said it is the best course of action for the county.
“It has the lowest true interest cost rate and the least impact on our max annual debt service,” he said.
The county hopes voters will pass a Local Option Sales Tax on the November 2022 ballot to pay for the project. If the ballot measure fails, the county would have to use a tax levy to raise funds, as the justice center needs to be built after the state issued a sunset letter on the county's current jail.
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The commissioners had heard proposals about using capital improvement bonds or specific jails bonds, but decided to go with general obligation bonds to fund the project, as they are less restrictive.
“This is step one in the process, to get the ball rolling on bonding,” DeVriendt said.
The specific interest rates and costs will be determined as the county goes through the bond issuance process.
The next steps include waiting for state approval on credit enhanced bonds, which the board passed during the meeting as well in order to get lower interest rates, and working with the county’s financial advisors to prepare the necessary documents to issue.
DeVriendt said the estimates are that bonds will be issued by late November or early December.
According to county officials, the initial design phase is expected to be completed in January 2022, with the first bids going out for the project in May and construction site preparations starting in July.
The commissioners had previously asked their financial advisor to look into bonding as early as possible to lock down the lowest interest rates possible. With the current increase in inflation, commissioners believe interest rates will rise as well.
District 4 Commissioner Mark Thell asked how it would affect the county's bonding plan if legislators give the county state bonding dollars.
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DeVriendt said county officials don't want to wait for the Legislature; they want to start the bonding process as soon as possible.
“Worst case scenario, which would still be the best case scenario, is to get additional funding from the Legislature,” he said. “We would use any excess to pay back the bonds.”
Carlton County Sheriff Kelly Lake also asked to seek a courthouse security grant from the state, which the board approved, for the proposed justice center.
The grant could be up to $500,000, and the county will apply for the highest amount possible.
“There is a 50% match required, but it is for cash or in kind, which we will definitely surpass with the justice center,” she said.
