County commission mulls jail, debt service
Loudon County Commission appears one step closer to getting a jail addition underway after commissioners discussed Monday a debt issuance plan to afford $15 million.
Commission will vote on a resolution April 3, with the idea to break debt into two bundles.
“It’ll be two because you can only borrow a bond issuance of $10 million a year max and get the bank rate,” Commissioner Leo Bradshaw said. “So you’ve got to do up to $10 million one year and do the rest of it the next year, so get the reduced rate on all the money.”
A determination on when the issuances would be done could not be definitively given, Loudon County Mayor Rollen “Buddy” Bradshaw said. Hopes are to get with Budget Director Tracy Blair and Cumberland Securities President Joe Ayres to iron out details.
“It sounds like we’re going to do it — we’ve got monies now that we can actually proceed with the architect and in the fourth quarter, October-November time frame or September maybe, then we can go ahead and proceed with the first bank bond. Then next year we’ll do the same thing in the fourth quarter,” Leo Bradshaw said.
During Monday’s workshop, commissioners were given
a debt service schedule from Cumberland Securities for 20 years at 3
percent interest. The first payment listed shows June 1, 2018, at
$448,750. Ayres was present to answer any questions from commission.
“We’ve had extensive discussions back in the last school building program about bifurcating your issues and being able to stay under what we call bank qualification rules, which would be under the treasury department,” Ayres said. “That means if you do not issue anymore than $10 million of bonds in a calendar year — not a fiscal year, but a calendar year — then you can designate your bonds to what we call qualified tax-exempt obligation and those bonds sell generally a quarter of 1 percent lower than non-bank qualified bonds.
“So you approve the $15 million transactions and you can lock in $10 million of that at today’s rates, you’re saving a quarter of 1 percent lower than if you sold all $15 million and you’ve hedged your interest rate risk on two-thirds of your $15 million by locking down $10 million,” he added.
Hopes are to pay for an architect firm without using borrowed money, with the bulk of funds coming out of the general fund, Buddy Bradshaw said.
“Based on the timeline the architect has given us, there’s a strong possibility there will be no actual dirt moved until the first of 2018,” Commissioner Van Shaver said. “We may need $750,000-$800,000 to deal with the architect. We could cover that without using borrowed money, but we would pay it back to where we got it from once we borrowed the money, which means we don’t have to borrow until (a later date).”
“fully” believes commission will choose Michael Brady Inc., as the
architect firm at the next meeting, noting “their track record is
“They’ve been with us the long haul of this and they’ve done a great job and are very patient with us as well,” he said.
Shaver asked commission if the Loudon County Corrections Partnership Committee might also need to be reworked a little, replacing Ninth Judicial District Attorney General Russell Johnson, Loudon County General Sessions Court Judge Rex Dale and General Sessions and Circuit Court Clerk Lisa Niles.
Shaver recommended Loudon County Sheriff’s Office Chief Deputy Jimmy Davis, Assistant Chief Deputy Paul Curtis and Jail Administrator Jake Keener.
“It’s better to have people in there that’s going to be involved in planning to determine how to best use this $15 million because it’s less than what we really needed,” Leo Bradshaw said. “We need some real good expertise on how to use it so we don’t waste something so that if there is a phase two then you could continue with it.”