County approves $10.3M certificates for judicial center construction
Polk County Enterprise - January 2008
LIVINGSTON — Polk County Commissioners approved an order authorizing up to $10,350,000 in certificates of obligation to fund construction of a judicial center Tuesday with a vote of 3 to 2.
Pct 4. Commissioner Tommy Overstreet and Pct. 2 Commissioner Ronnie Vincent cast yes votes and Pct. 1 Commissioner Bob Willis and Pct. 3 Commissioner Buddy Purvis voted against.
The certificates will fund construction of a $10 million judicial center plus architect and engineering fees.
The 38,157 square foot facility is designed to reduce the security threats posed by the close contact between inmates and the public in the current courtroom facilities as well as the multiple entrances, architects with Hester and Sanders said in previous meetings.
Jim Gilley, bond counsel for Coastal Securities, told commissioners that the underwriters offered an interest rate that came in much lower than estimated.
The court gave notice that $10.35 million in bonds would be issued but due to a credit enhancement with FSA the county will actually offer $10.121.
“Some of the turmoil in the subprime (mortgage) financing has spilled over into bond markets,” Gilley said. “There are two companies that the bond market feels like are very clean and have little exposure to those loans; one of those is FSA.”
Polk County has a AAA rating by Moody’s and S&P, the leading bond rating agencies in the nation.
Moody’s increased the county’s rating to A3 in the middle of last year and S&P upgraded Polk County to an A-, Gilley said.
“Those ratings are complementary of the financial management and operation. I think all of this was taken into consideration when we received a 3.99 percent interest rate.
Gilley added that the certificates can be prepaid at the county’s option possibly in one year.
The debt will be fully retired in 15 years (2023) and he expects to close the loan on Feb. 7.
The design for the new facility was guided by a planning commissioner that has worked for years to try to improve conditions at the courthouse. Previous efforts to fund additional facilities with bond elections failed.
Under the measure approved Tuesday, the certificates of obligation will be repaid with revenue from leasing cell space at the IAH detention center.
Anticipated revenues may also be used to retire the $19 million in certificated of obligation to fund renovation and expansion at the county jail.