Oconto County hit the market at just the right time, as the County Board on Thursday authorized the issuance of $15 million in promissory notes for the law enforcement center.
The county will pay 2.19 percent interest on the 10-year note.
“I’m pretty darn happy with those rates,” said the county’s bond adviser, Jeff Belongia, of Hutchinson, Shockey, Erley and Co. He said market trends created the perfect storm for issuing money.
“If you’ve looked at the stock market … it’s tanking,” Belongia said. Because of this, people are taking money out of equities and purchasing municipal bonds.
“We’re in a position to save literally millions in interest costs compared to what we would have done if we had financed this two years ago,” Belongia said.
As a result, the county will make principal payments instead of interest payments in some instances.
This was the second of two bonding resolutions the County Board considered. A $10 million note at an interest rate of 2.32 percent was approved in June, and the county plans to refinance both notes after 10 years, spreading the payments over 20 years.
The law enforcement center is under construction adjacent to the courthouse and includes housing for up to 175 inmates, a sheriff’s administration area and a 911 center.
The total cost of the LEC is estimated at $31.75 million. To pay for the facility, the County Board approved $25 million in bonding, transferred $5 million from the county’s general fund and took $1.75 million from sales tax.
Sales tax revenues of $830,000 annually will be used to repay the notes; this is about half of the sales tax revenue the county generates.
Taxpayers saw the impact of the bonds on their property tax bills in December. Property owners pay 25 cents per $1,000 of assessed property value, so for a $100,000 piece of property, that’s $25 more in taxes.
In advance of securing the $15 million note, the county was re-evaluated by Standard and Poors Rating Services and was again ranked AA+. The only higher rating is AAA.
“That’s something the county should be really proud of. There aren’t many AA+ counties in the state,” Belongia said.
“This shows the county is in good shape financially,” County Board Chairman Lee Rymer said.
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