story by Ryan Saylor
rsaylor@thecitywire.com
The Crawford County Quorum Court got their first look at when it will be able to start spending bond monies tied to the voter-approved sales tax to fund construction of a new county jail, along with law enforcement operations.
The election on May 20 was the fourth time the county had attempted to get a sales tax passed for construction of a jail, with the measure passing by just a few hundred votes and providing about $20 million for the project, which will bring the county into compliance with the state regarding jail overcrowding.
Kevin Faught, vice president of public finance at Stephens Inc, told the court that the bonds would be put to market Aug. 18, with the county able to begin spending money toward the project on that date. Money raised from the bond sale in August will be available to the county Sept. 24, Faught said.
Any purchases or contracts made by the county before that date will be reimbursable from the proceeds of the bonds, he added. That said, bond attorney Ryan Bowman of the Friday, Eldridge, and Clark Law Firm reminded the Quorum Court that it would have to go through a trustee to have access to the bond money for the project, a way of assuring the jail bonds are kept separate from other county monies.
Bowman also made clear that IRS regulations stipulate that the county must spend or have contracts that equal 5% of the total bonds issued by March 2015, meaning the project is set to begin quickly now that the election is complete and work on issuing the bonds has begun.
County Judge John Hall told the court that work was being completed by Hawkins-Weir Engineers in Van Buren to make sure the site under preliminary contract with the county along U.S. Highway 64 just outside of Van Buren city limits was suitable for the facility to be constructed. If testing comes back affirming the decision to construct east of town, Hall said the court would likely vote to approve the contract for the land in August.
Bowman also gave the court and the public the first timeline of when the project could be completed, again based on IRS regulations stipulating spending of bond monies.
"And then you have to spend the money within a three year period. So, roughly September 2017, your project needs to be completed and your money spent. And again, those are just IRS rules because you're issuing these bonds as tax exempt, there are a number of rules the IRS puts into place with respect to your bond issue."
As for the cost to the public, Faught said the sales tax would begin Oct. 1, with December being the date collected sales tax revenues would be remitted to the trustee of the bonds.
The distribution of the sales tax by the trustee to the county will only include the quarter-cent law enforcement operations portion, while the trustee will hold the half-cent of revenues for construction of the jail. He or she will use that money to pay out contracts associated with the project, Faught said, which includes reimbursements to the county should it pay any contracts or costs out of the county's general fund.
Once the bonds are purchased by investors, which Faught expects to largely be institutional investors, he said maturities on the bonds are likely to range from eight to 10 years with the county repaying the principal of the bonds plus twice-yearly interest payments.
Hall, speaking publicly for the first time since the election, thanked the court and Sheriff Ron Brown for their work in getting the sales taxes passed.
"This was a well-handled (campaign)," he said, adding: "All together, it's a team effort and it was a lot of fun. The sheriff and I had a lot of fun. There toward the end, it was called the Ron and John dog and pony show when we'd give our talks. … Anyway, we really appreciate your all's support (Bowman and Faught) in helping us walk through this and also the Quorum Court's."