Albany County will soon issue $1.655 million of bonds to be able to more quickly finance some of the projects that will ultimately be funded by the new special purpose excise tax that was approved by voters last August.
When voters last approved a SPET tax in 2010, the county issued bonds through a public sale.
This time, Albany County commissioners have opted to sell the bonds through a “private placement,” which could mean a single bank will buy the entire issue.
The commissioners approved that approach at a May meeting. Albany County Treasurer Tracy Fletcher told the Laramie Boomerang that Todd Bishop, CEO of Kaiser Wealth Management, is now tasked with approaching banks to gauge interest.
“We’re probably going to have multiple banks that want to buy the entire issue,” Bishop told commissioners in May.
Bishop said there shouldn’t be any shortage of interest since the county is issuing “general obligation bonds,” meaning the government promises to repay the creditors by any means necessary.
Under the SPET’s August ballot language, the county was given the authority to implement a mill levy to repay the bonds in the extremely unlikely scenario that sales tax revenues don’t cover the county’s costs.
“That’s not the intent of how these bonds will be repaid,” Bishop said. “We are truly going to rely upon the sales tax to repay these bonds. Putting that general obligation bond language in that tax question is going to allow the issuer to be able to borrow that money at a lower interest rate than if we were just to rely on the sales tax.”
The county should ultimately bring in $11.9 million in SPET revenue, and Bishop is projecting that revenue to be fully collected by 2030.
Commissioners had originally considered a public sale, which Bishop said might allow the county to get better bids on interest rates, but the savings are likely to be outweighed by the extra upfront costs the county would incur through a public sale.
“If the goal is to issue the bonds as soon as possible at the lowest interest rate possible at the least expensive to the county, then it’s private placement.” Bishop said. “If the goal is to make this investment available to John and Sally Smith that live off of Ivinson, then you have to prepare that disclosure document (for a public sale).”
With such a small bond issue, Commissioner Pete Gosar said it’s probably not worth it to have a public sale.
“If it was $16 million, I might have to know a little bit more,” he said.
“My feeling is that our budget is so tight that we can do more for the county by selling the bonds as private placement,” Commissioner Terri Jones said.
While private placement doesn’t allow for citizen involvement, Bishop estimates that a public sale would cost the county about $35,000 more. He said the county should expect to have a fixed interest rate of about 2.5% for the bond issue.
As part of the SPET tax, the county has IT upgrades planned for phone systems, hardware and networking. Of that, $610,000 was being originally planned to be covered by bonds, but the county expects to bond for just $500,000 and rely on emergency funds to cover other IT needs if necessary.
Sheriff David O’Malley will use $250,000 to renovate aspects of the county jail, including adding a padded cell to protect people detained during a mental health crisis.
Commissioners will use $500,000 of bond funding to renovation the north entrance of the courthouse.
Commissioners will also use $325,000 of bond funding to reimburse itself for the purchase of the 3.7-acre Range Arena property south of town.
Along with funding for Laramie and Rock River, the SPET tax approved the new funding for the county after overwhelming public support at the Aug. 21 election.