Experts prepare to dish out finanical advice to county
Published 4:35 pm Tuesday, June 10, 2008
Nobody offered them toaster ovens or Minnesota Timberwolves game tickets. Just advice.
The Mower County Board of Commissioners heard presentations from three financial advisors Tuesday morning when they met in regular session: Springstead, Ehlers and Associates and Northland Securities.
The firms’ representatives to become Mower County’s agent for the sale of bonds to finance construction of a new Mower County Jail and Justice Center.
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Only Richard P. Cummings, 1st District, was absent. The other four commissioners and county coordinator Craig Oscarson listened intently to each presentation and asked questions when necessary.
“I know our county board is really going to sharpen their pencils when it comes to deciding on this project’s cost,” said the county coordinator.
The parameters given the advisors included finance construction of a 128-bed jail and justice center for district court, court administration, county coordinator and correctional services for $30 million, $27 million of which will be financed with the sale of bonds and the rest coming from the county’s own available financial resources.
The Springstead representative went first.
The consultant was the only one to mention the debt service on a $27 to $30 million bond issue would be $2.9 million.
The Springstead representative touted the firm’s extensive experience with municipal bond issues and its intensive attention to detail.
“We’ve got the team to take you from A to Z on something like this,” the representative said.
Oscarson asked the representative if it would be advantageous to consider a 30-year repayment plan, and the Springstead spokesperson said it would. “Twenty-five to 30-year issues are becoming more and more common all the time.
“They will cost more over time,” added Oscarson, “but there are advantages to spreading out the payments.”
Ehlers and Associates’ representatives began my touting their own public sector experiences as city manager and county coordinator before becoming financial advisors.
They praised Mower County for being “virtually debt free” and having only $400,000 in sewer debt resulting from a wide-ranging loan program to help property owners come into compliance with wastewater treatment regulations. The debt is being repaid by the property owners’ assessments.
The Ehlers and Associates representatives reviewed the county’s bonding options, including, in their words, “Do it all now or do some now and some later.”
Noting in the firm’s handout that $235 million has been spent on jails in recent years, Ray Tucker, 2nd District, quipped, “It seems we have a problem here.”
The Northland Securities’ presentation began with one of the representatives recalling how he was a financial advisor for the city of Austin for 25 years before making career changes. And, the firm is an investment bank as well as a financial advisory firm.
With more than 30 jail and justice center projects, including Blue Earth County, Northland Securities has also assisted Dakota and Olmsted counties with jail/justice center projects.
The firm provided the greatest detail about how they could engineer jail/justice center financing options.
They have also done their homework to prepare for Tuesday’s presentation.
Northland Securities’ advisors met with the county’s KKE Architects, Inc.
That resulted in revealing the county commissioners are setting aside $800,000 for geothermal heating/cooling needs in the new facility.
They claimed there’s a geothermal financial option that can save them the money to install it. They also said the county could sell carbon credits and generate a revenue stream with Clean Renewable Energy Act initiatives.
They went so far as to encourage the county to issue $10 million in bonds this year and more next year to take advantage of an anticipated $300,000 savings initiative.
They also advised the county could develop a substantial revenue stream in interest earnings during the anticipated 14- to 18-month construction schedule: $672,000 to be exact.
The figures flew during the presentations, like so many crows over a cornfield, until all three had made their best pitches and the commissioners had had enough.
Afterwards, Oscarson said, the commissioners will study the information, review references, weigh options and make a decision on who will spend the county’s money on the new jail and justice center within four weeks.