Courthouse Committee Hears Financing Options

Courthouse Committee Hears Financing Options

By Mike Scott

Clark County’s “Courthouse Committee” met again on Tuesday, March 24, to hear options to finance a new courthouse facility for the county.  At their previous meeting, the committee had recommended that the county demolish the existing 137-year-old building, replacing it with a larger, two story building that would put all county offices back under on roof.
On hand to advise to committee and Clark County Commissioners was Greg Bricker of George K. Baum and Company, which specializing financing public projects such as the courthouse.
“On this project, there really only one financially prudent way to finance 3.5 to 4 million dollars, and that is through the issuing of general obligation bonds, “Bricker said.
Issuing bonds would require voter approval by a supermajority.  The amount of votes needed for passage varies depending on the election.  April elections require a 4/7 majority.  August and November elections in even years also need a 4/7 majority.    February and June elections, as well as August or November of odd years, require only a 2/3 majority, according to Bricker.
“Two-thirds is a real challenge to pass,” said Bricker.
The bond payment for this project would be cost taxpayers approximately $300,000 per year for twenty years.  
If it were financed by a tax levy of  35 cents per $100 assessed valuation, it would cost a homeowner with a $75,000 house approximately $50 per year more in property tax.  If they also owned $25,000 in automobiles, that would add an additional $30 tax burden.
One option discussed was combining a property tax with a 1/2 cent sales tax to pay for the project.  The 1/2 cent sales tax would generate about $260,000 per year, reducing the property tax burden.
Both issues could be placed on the ballot in August.  The sales tax issue would require a simple majority for passage, and the general obligation bond would require the 2/3 majority.
“It’s very possible the sales tax could pass and the bond issue fail,” said Bricker.
In that case, the commissioners would likely run the issue again in a 4/7’s election,
Depending on how the sales tax issue is worded, the tax could be collected starting in January 2010, or could be delayed until passage of the bond issue.
“I think we’re close to the point of view that its not a matter of if something is going to be done with the courthouse so much as when it will be done,” Bricker said, noting that construction costs have declined and interest rates are at 40-year lows due to the soft economy.
Scott Summers advised the committee and commission about two legal issues concerning the proposed project.  The first is that the building is on the National Register of Historic Places, and the second is the 2008 Emergency Stabilization Grant from the Missouri Department of Natural Resources.
“We have a contract with DNR that I just received,” Summers said.
That covenant requires the county to “preserve, maintain and operate the Property for purposes that are compatible with its historic use and function”.   It also states that “No structure or part thereof shall be removed or demolished without the prior written approval of MDNR, unless immediate remove is necessary for the prevention or treatment of disease or for the protection of the Property.”
“Generally speaking,” Summers said, we may have to pay back the $57,000 grant to the state.”  Summer said he was hopeful that the DNR would waive any penalties, because the money was needed to stabilize the building and keep it from falling down.
“We questioned the engineer about if we took the grant money, would it stop us from being able to do anything in the future?” former commission Wayne Bourgeois said.  “The answer was always no.”
“If I had any idea it would prevent us from going forward, I wouldn’t have signed it,” Bourgeois said.
The other issue is that the building is on the National Register of Historic Places list.
“We understand there is a process to delist it, and that it takes at least six months.  And we haven’t begun that process,’ Summers said.