May 10, 2024
By: Dwayne Page
Is it time for the county commission to consider adopting a bond resolution authorizing funding for a judicial center?
During Thursday night’s meeting, the budget committee took a vote on asking the county commission to adopt an initial and detailed bond resolution authorizing funding not to exceed $65 million for construction of a judicial center. This vote did not include any recommendation on a funding source for the project even though that will have to be considered prior to adoption of the budget for 2024-25. Although three of the five budget committee members in attendance at the meeting voted in favor, four votes in the affirmative were needed to move the recommendation along to the full commission. The budget committee will have to try again at another meeting when all seven members can attend.
Members voting in favor were budget committee chairman Jeff Barnes and members Mathias Anderson and Glynn Merriman. Members Tom Chandler and Sabrina Farler voted no. Members Susannah Cripps and Tony (Cully) Culwell were absent.
Steve Bates, the county’s fiscal agent and financial advisor suggested that the budget committee make a recommendation for the bond resolution to the full commission.
Last month the jail committee selected a construction option for a judicial center to be considered by the full county commission. The estimated cost is $63,817,500 (not counting purchase price for property and the expense of staffing) and could require as much as a 65-cent property tax increase or a combination 47 cent property tax hike coupled with a $50 wheel tax.
According to Bates, a property tax increase will be needed in the 2024-25 fiscal year as an initial funding source for debt service even if a wheel tax is later adopted by the county commission or through a public referendum. If a wheel tax is eventually approved for the project, Bates said the property tax increase could be reduced to help offset it.
“If you are going to do this judicial center then what we probably need to consider is setting the tax levy for debt service to amortize this judicial center in this budget,” explained Bates. “Right now its not going to be a wheel tax. Its going to be a property tax (to fund it) but even if you implement a property tax increase now that revenue won’t come in probably until February or March. If you want a wheel tax then you must adopt it at two consecutive county commission meetings by a two thirds majority and then if people protest it by petition, then it has to go to a public referendum, or you can vote to put it on the ballot in November. But regardless, you are going to have to increase the property tax now in this budget. Then if the wheel tax passes, you can cut the property tax back in the 2025-26 fiscal year. That way people have a choice of either funding this through a property tax, wheel tax, or a mix of both,” said Bates.
‘I would also say that in order to do that, you would need to adopt an initial bond resolution and a detailed bond resolution authorizing the issuance of not to exceed $65 million in bonds, but we (county) would sit on it (for now) because if you are going to issue bonds you must have a funding mechanism in place to pay that. You cannot go to a rating agency without a funding mechanism in place or you’ll get crushed. If you set the tax levy the revenue will be in place. That way, with the bond resolution in place, when you are ready to issue bonds which could be six or eight months later you already have the revenue coming into the debt service fund to pay the debt as it becomes due and payable. You cannot issue debt thinking that the money is going to come in. You must know it’s coming in,” explained Bates.
Again, the county commission has the option of voting in a wheel tax by a two thirds majority on two separate readings of a resolution, but the public could force a referendum by petition.
According to the election commission, the law states that “The petition must be filed by a number of registered voters amounting to at least ten percent (10%) of the votes cast in the county in the last gubernatorial election (locally 523 signatures); and the petition must be filed with the county election commission within thirty (30) days of final approval of such resolution by the county legislative body.
Budget committee member Tom Chandler suggested that the county needs to make the public fully aware of the proposed judicial center construction project and the funding options required and let the voters have a voice in that through a public referendum.
“This may not be the purview of the budget committee, but I would think that we should make some recommendation at some point about putting the wheel tax on the ballot in November. Don’t wait for them (public to get a petition) but allow them to speak. Make this public so that they know what is going on and what their options are. Its an iffy situation but I think most people in the county would want to be able to vote on whether or not to have the wheel tax and if we put that out there, we can get closer to them (public) thinking about the trade-off between the wheel tax and the property tax and what its going to cost them for this justice center. We need to try to get them as best we can to make some decision about what they would like while making them feel the county commission has given them some ability to do that rather than for the commission to decide at some session that we are going to tax them for $65 million,” said Chandler.
The next county budget committee meeting is set for Tuesday, May 14 at 6:00 p.m in the first floor meeting room of the courthouse.