February 5, 2020
February 5, 2020
Commissioners Robert ‘Pits’ DeArmond, Scott Blain, and Bill Bullock; Angela Newell, Administrative Officer; Barbara Daniel, Commissioners’ Secretary; Josh McQuillan, Sheriff; Dakota Mitchem, Joliet Mayor; Amber Foechterle, Joliet Clerk/Treasurer; Betty Sweet, District Clerk Bridger Schools; Steve Simonson, Beartooth RC&D Economic Development Director; Jane Swanson-Webb; Denise Rivette; and Shelly Thompson were present.
2:10 p.m. Commissioner Blain called the meeting to order and initiated a conference call with Bridget Ekstrom, of D.A. Davidson, to discuss Bond underwriting for the proposed Detention Facility. Per Ekstrom, now is the perfect time to offer Bonds because AAA Municipal Bond interest rates are at a record low while demand is high due recent tax law changes.
Ekstrom provided details about the two options available for Bonds: Level Debt Schedule where the mills charged to taxpayers would change over time with growth/changes to the tax base and where highest taxpayer costs would be upfront; or the Level Levy Schedule, which would wrap debt service around the upcoming Pryor Mountain Wind Farm project and would be favored as an effort to keep taxes as low as possible over the full 20-year bond for taxpayers.
Ekstrom detailed her calculations and assumptions for the costs to the County and impact on taxpayers. Carbon County has demonstrated strong growth for the past 4 years and therefore her 2% growth estimate is conservative and reasonable. Additionally, the Pryor Mountain Wind Farm Project is estimated to become a “Top 3” Major Taxpayer in the County’s 2021/2022 Projected Taxable Value once its tax abatements have concluded.
Ekstrom recommended that when the County is asked about the estimated tax impact of the Bond issue, that taxpayers be directed to the State website (http://svc.mt.gov/dor/property/prc) to look up their property’s “Taxable Value”, or look at their Personal Tax Statement, and use the formula: “Taxable Value” x Mills/1000 = Estimated Annual Tax Impact of the Bond.
Commissioner Blain asked whether the interest earned on the Bond or the Bond Premium paid by investors could be used for Operating expenses in the first year; Ekstrom said that they can only be used for Capital expenses, not Operating.
Simonson said that with the Joliet site selection, the lower median household income (vs. rest of County), potentially qualifies the Detention Facility project to apply for a USDA Rural Development grant which can fund up to 35% of the cost to build.
He asked Ekstrom that should we receive a grant, can we pay off the Bond early. Ekstrom recommended issuing only a certain number of Bonds and waiting on issuing the remainder of Bonds until grant funding is determined. The County can communicate to taxpayers that it is actively pursuing grants and may not use the full authorization the voters are being asked to approve. The disadvantage to waiting to issue bonds, however, is that rates may go up due to market uncertainties.
Simonson asked whether any projects/mills are falling off the County’s liabilities in the coming 20 years; Newell said that the County is at its base taxing authority using floating mill calculations and the permissive mill levies for health insurance and sheriff retirement, and no debt obligations. Commissioner DeArmond expressed that the County hasn’t asked taxpayers for much in the past 20 years.
Rivette asked about mental health facilities at the proposed Detention Facility. Commissioner Bullock replied that while mental health services will be provided to inmates, the building of a Mental Health facility is not the goal of this Bond measure.
Commissioner Blain asked whether a Law and Justice component could be added to the Bond; Ekstrom stated that language can be added to the ballot: “to the extent that funds are available” (that could allow other capital projects to be completed with surplus funds once the Detention Facility is completed).
Commissioner Bullock expressed appreciation to Ekstrom for clearly detailing the options available and the calculations showing that annual costs to taxpayers will be even lower than initially estimated.
3:18 Conference call with Ekstrom concluded.
Discussion ensued. Commissioner Blain expressed that if there was ever a time to do it, now is it because of the low interest rates and upcoming the Wind Farm’s taxable value that will be added. Commissioner Bullock stated his preference for the Level Levy Bond Schedule; Commissioner Blain and Simonson concurred. Commissioner DeArmond noted that the Pryor Mountain Wind Farm Project’s contribution to taxes should help quell its opponents. Newell said the County’s actual growth has been approximately 4.5% over past 10 years so Ekstrom’s 2% is a conservative figure.
Rivette asked whether water availability is a concern with Joliet site. Foechterle said that Shawn Kuzara, hydrogeologist from Montana Bureau of Mines and Geology, did a hydrology study on the local aquifers and that John Wheaton, also a hydrogeologist of Montana Bureau of Mines and Geology, spoke to that study at the January 28th Joliet public meeting regarding the proposed Detention Facility; Wheaton stated that water availability is not a problem.
Newell spoke about yesterday’s meeting with Bond Counsel Nathan Bilyeu, of Jackson, Murdo, and Grant P.C. Newell stated that Bilyeu’s observations with working with Lewis and Clark County were opposite to Carbon County’s. Communities in Helena fought for who would have the privilege (economic benefit) of hosting their Detention Facility.
Respectfully submitted: Barbara Daniel, Commissioners’ Secretary