Lazaro Aleman
ECB Publishing, Inc.
Expectations are that the city and county will soon receive their monies from the $4 million bond that the two government entities have been in the process of securing since mid last year for road improvement projects.
That, at least, was the word from Clerk of Court Kirk Reams in his last update to the Jefferson County Commission on Thursday evening, Dec. 2.
Reams, who stays in close touch with the financial and legal people who have been preparing the bond proposal for the marketplace, informed the commissioners that although some last-minute details yet remained to be completed, much of the groundwork for the bond had already been done.
It was his hope, Reams said at the time, that the bond funds would become available as soon as this month.
“As far as the money coming down, I feel that January is a good framework,” Reams said, adding that County Coordinator Parrish Barwick, who oversees all road–improvement projects, had already done much preparatory roadwork and was “ready to hit the ground running” when the money arrived.
The county commission approved the resolution that kicked off the process for the securement of a $4 million bond in June 2021, wanting to take advantage of then low-interest rates. The decision came after months of discussion.
The lengthy resolution that the commission adopted at that time was actually supplemental to the one that the board had adopted in 2012. In actuality, the new resolution largely extended the terms and pledges of the original resolution.
The underwriter for the new bond is San Blas Securities LLC, of Atlanta, Ga., and handling the legal paperwork for the bond is Nabors, Giblin & Nickerson – the same Tampa-based legal firm that prepared the documentation for the 2012 bond.
The City of Monticello and Jefferson County, meanwhile, have signed a Memorandum of Understanding (MOU), as this is the first time that the former is participating in a bond-seeking enterprise.
The MOU spells out how the city and county will cooperate and how share the money, as well the twos’ responsibilities and liabilities in terms of the bond. It also sets down the basis for a more formal interlocal agreement between the two.
Per the terms of the MOU, the city committed to pay $30,000 annually from its five-cent gas tax revenues to repay its portion of the 20-year debt.
The county, meanwhile, committed about $183,000 annually from its five-cents tax revenues to repay its greater portion of the 20-year debt.
It’s expected that after the fees for attorneys, underwriter and other costs are deducted, the county will receive $3 million-plus of the bond money for paving projects, and the city will get about $521,000 for its portion.
As the bond initiator, the county also will pay all the costs of its issuance, including the additional costs occasioned by the city’s participation in the measure.
Both the city and county have already prepared a list of the roads that they plan to address with the funding.
For the county, this is its fourth borrowing of money for road improvement projects. Its other bonds were secured in 1992, 2012 and 2018, all of which have had fuel tax revenues pledged for their repayments and which have resulted in about 140 miles of dirt roads being paved.
Equally important, Reams argues, the paving of the roads make them eligible for millions in state funding for their later resurfacings.
Interestingly, at a recent meeting, Phil Calandra, a citizen, expressed a different take on the borrowing. The bond debts, Calandra suggested, could well potentially put the county’s financial health at risk in the long run.
His concern, Calandra said, was about the county’s ability to repay the bond debts, as the money for the payback was derived from tax revenues generated from fuel sales.
“Can we really project out, from now until 2041, if we’re going to be able to get enough gallons of gas sold to pay back the debts,” Calandra asked.
He reminded the board of the situation in 2020, when Covid and the lockdowns drove gasoline consumption to almost nil, a scenarios that could potentially repeat.
Add, he said, the fact that electric vehicles were becoming ever more popular and could well be the wave of the future and it behooved officials to consider these possibilities. It was something to keep in mind when the commission contemplated future road bonds, Calandra said.