First bond approved for county projects

December 13, 2012

Steps being taken toward the county's projects for courthouse renovation, new jail/sheriff's office

At the Nolan County Commissioners' meeting on Monday morning, December 10, the commissioners took action to approve an order authorizing the issuance of a general obligation bond for 2012 not to exceed $10 million. The bond approved by the commissioners came in at $9,480,000.
Making presentations to the commissioners were Paul Jasin with Specialized Public Finance, Inc. and Tom Pollan from Austin.
Jasin discussed the final results from the transaction from the first GO (general obligation) bond from this past Thursday, December 6. With rates at an all-time low, the company was pleased with the transaction as the market was caught at a favorable time.
Also part of this process was for the county to obtain a rating from Standard & Poor's, better known as the S&P. Jasin informed the commissioners that the county received a favorable "A" rating from S&P, in which a summary of the rating was given.
With this first bond, SPFI expects to close by Thursday, December 20. Both bonds to be obtained by the county will be named as "bank-qualified," or a BQ bond.
Looked at in the presentation were the incoming and outgoing funds, along with the fees for the underwriter. And because the bond is considered as BQ, the interest rate is lowered.
The commissioners were informed on where the bonds were sold--which included some area banks. A complete distribution list was presented which outlined all of the buyers.
A timeline was then presented for the next steps as well as the timeline for next bond, which will be around $5.8 million. Another presentation will be given at the January 14, 2013 meeting for the second bond, with the expectation of a February 12 delivery date.
Pollan then made a brief presentation, noting that with this BQ issue, no more than $10 million can be issued in a fiscal year. Since January 13 would be a new time period, the second bond could be obtained.
With this first bond, the financial advisor sought the best way to deliver to the county. Breaking the bond issues into two makes it a more financially reasonable move, and money is saved.
The order of the bond was additionally discussed, along with the payment schedule. The items were broken down by the county jail, courthouse, and the new sheriff's office.
And because the bond is issued as tax-exempt, some obligations must be met. Among them is a report to be given to the federal government on the county's status of the bond.
The time frame for the December 20 deadline is tight, but steps are taking place to meet that date. Thus, the $9,480,000 bond was approved, in which the agenda item which also outlined other steps of action: "levying a continuing direct annual ad valorum tax on all taxable property within the county to pay the interest on said bonds and to create a sinking fund for the redemption thereof and the assessment and collection of such taxes; authorizing the sale thereof; and enacting provisions incident and related to the issuance of said bonds."
Another action item regarding the courthouse renovation was briefly presented, as approval was also given on a contract to remove the battered wall / slanted wall of the courthouse.
The prior contract for the removal expired on Saturday, December 1, and no money will be due for this previous agreement. The approved contract is with McGlothlin Construction in Roscoe and comes in at the total of $25,000.

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