Supervisors discuss funding road, building improvements

Jefferson County supervisors today discussed funding, bonding and assessments to pay for the estimated $850,000 costs of road improvements and a building project.

Jeff Heil, vice president of public finance with Northland Securities, Haverhill, said the county can go with general obligation bonds, but he also addressed assessment bonds, in response to board inquiries.

?I don?t think you want to do assessment bonds, you can do bonds like you?ve been doing,? Heil said. ?There?s not a significant difference in costs.?

Supervisor Steve Burgmeier asked what rate Heil has gotten on bonds issued recently.

?If you were ready to go today, a 10-year bond would carry a rate in the low twos,? said Heil. ?If it was for 15 years, it would be under 2.5 percent.?

Heil did advise that any new bonding the county is looking to do should not be added to current, outstanding obligations.

?You?re now paying about 25 cents per $1,000 on your 2009 obligation,? he said. ?If you wrapped another $800,000 for 10 years on the back of that, it?s another 12-13 cents per $1,000.?

Which would put the rate back up to 35 cents, noted Burgmeier.

If the county went with a 7-year bond, the cost would be about 18 cents per $1,000, Heil said.

?With a special assessment bond, you want to charge your customers a high enough rate to give them incentive to pay it off as quickly as possible without overburdening anyone,? he said.

Burgmeier wanted to know if some property owners are able to pay their share of the cost up-front, if the county would still be obligated to borrow the full amount. Heil said no.

Melanie Carlson, an engineer with French-Reneker Associates Inc., said the road improvement costs should be finalized in January, but she gave an estimate of $650,000.

The supervisors are hoping to earmark another $200,000 for a building project.

?You should probably wait until you have the final hard costs before financing,? said Heil.

The county needs to set its budget for the year in a few months.

?We?ll hold a budget hearing in March,? said Supervisor Dick Reed.

The supervisors will need to approve a levy in the next few months to be able to start collecting it in June 2013. If delayed, the levy wouldn?t start until the following year, June 2014.

?We?ll hold a bond hearing at the end of January or beginning of February,? said Reed.

Fairfield Public Library?s director Rebecca Huggins, asked the supervisors to restore its level of funding from the current $68,000 to $72,000 annually.

?Several years ago, the county funded us at $72,000,? she said.

Huggins reported on the library?s activities, projects, collection, circulation, staffing levels and partnerships over the past year. She said the library offers more than 100 types of services to the community, and is one of 30 in the state?s 540 public libraries open on Sundays except for summer time.

Reed said they are asking all departments to state their budget requests. He gave no indication today of a projected annual allocation for the library.

Natel?s owner/president Michael Schill and project manager Celesta Schill Napoleao returned today after talking with the supervisors last week.

Natel is asking the board of supervisors to guarantee a $855,000 loan so Natel can be granted $3.8 million from the U.S. Department of Agriculture to install broadband wireless to Jefferson County and 11 other southeastern Iowa counties. Natel has not yet been able to have a bank approve a loan.

Heil said municipalities are not set up to act as banks or financial managers. However, the county is allowed to do it, if it holds a public hearing.

?We do want to encourage economic development,? said Reed. ?But this would be setting a precedent to bond for a private company.

Supervisor Lee Dimmitt asked what collateral Natel would provide. After some discussion, it was determined the collateral would be a certificate indicating the number of jobs the project would create in Jefferson County.

?So, in laymen?s terms, we?re co-signing a loan and could be out there for $850,000?? said Dimmitt.

Heil said, yes, and it would be for three years from the date of the public hearing.

Reed asked Natel to get on next week?s supervisors? meeting agenda so the supervisors could take action, either to agree to having a public hearing about loaning the money or not.

The supervisors will meet at 9 a.m. Dec. 27, a Tuesday, because many people will be taking Dec. 26 off as part of the Christmas holiday.