County to try to bypass debt law
County commissioners voted Monday to make an end run around a state law limiting how much debt they can incur so they could finance bonds to pay for road work.
David Arteberry, public finance director with Stifel, Nicolaus and Co., whose company likely would bid to oversee the bond sale, told commissioners about a law that permits counties or cities to issue bonds for secondary arterial highways as long as the bonds do not exceed 2% of the county’s assessed valuation.
To issue bonds under that law, commissioners first would have to pass a charter resolution that the county was not subject to the state’s debt limit, Arteberry told them.
Commissioners were looking for a way to finance $5 million in bonds for work on Indigo Rd. south of Hillsboro, Kanza Rd. from US-56 to Ag Service, and 190th Rd. from K-256 to Hillsboro.
“I’ve got quite a bit of information about bond issues and about costs,” Arteberry said.
Most counties are deciding they need to sell bonds and are issuing them by passing charter ordinances and waiting through a protest period of 60 days in which residents can challenge the action and force a referendum on the issue.
Arteberry recommended that commissioners pass the ordinance and start researching bond options so bonds could be issued as soon as the protest period expires.
“I don’t really see all that often petitions raised for things like this,” Arteberry said.
He estimated a $5 million, 10-year bond would cost the county $584,000 a year or, at present valuation totals, 3.6 mills.
The interest rate the county would be expected to pay would be 0.225.
Arteberry said the interest rate for a 15-year bond would be 0.25% less.
Engineer Brice Goebel said he’d heard “a lot more” federal money was available for transportation work, but the timeline for counties to apply and get funding would mean the county likely would not find out whether it was approved until the end of 2022.
Commissioner Randy Dallke asked whether the money could be used for other projects if the county issued more bonds than needed. Chairman David Mueller said the commission needed to keep taxpayers in mind.
Arteberry said many banks still were buying bonds, but he’d noticed some were holding back, waiting for interest rates to go up.
Commissioners voted to pass a charter resolution and work with Arteberry to begin the process.
In other business, commissioners:
- Set priorities for use of American Rescue Plan money, with premium pay for employees, coming in first.
- Approved a permit for a new trash service to operate in the northwest portion of the county.
- Heard from park and lake supervisor Isaac Hett that the Kansas Department of Wildlife and Parks had offered to pay $6,000 toward construction of an extension to the county’s new heated dock.
- Interviewed law firms Klenda Austerman and Kelly Law about handling property tax sales but did not make a decision.