Marion County residents and banks may get the first chance to buy bonds to build the new county jail if county commissioners follow through with plans discussed Monday.
David Arteberry, bond counsel with George K. Baum & Co., presented three bond plans to raise the estimated $3.51 million required for the jail on recently acquired properties along Fourth Street east of the courthouse in Marion.
Although the commissioners haven?t decided on the plan to be followed, they said they were favoring the second or third options to give time and reduce costs on the bond issue.
Arteberry said Plan 1 would be to sell the entire bond issue at once to lock in today?s lower interest rates. But that plan would leave the county with interest growing; the first payment wouldn?t come due for construction until possibly October, he said.
Under Plan 2, Arteberry said the commissioners could issue temporary short-term notes for a temporary construction loan to go through the bidding process, and then issue bonds when they know what the costs are really going to be.
Arteberry said under Plan 2, the commissioners also could be risking that bond rates could increase.
Under the third option, Arteberry said commissioners could issue half of the bonds, say $1.7 million worth, to lock in the current low interest rate, and then do the second issuance when needed.
Arteberry said if interest rates go up, commissioners, by not financing right away, could look at a bond rate increasing from 4.5 percent to 5 percent, and costing $281,650 in annual payment rather than $269,000, therefore extending payments two or three months.
Commission Chairman Roger Fleming said if the first sales tax authorized for the new jail is collected by the state in July for distribution to the county in September, it might be able to be used against first construction charges in October, therefore delaying bond issuance.
Commissioner Randy Dallke said he didn?t like to have money ?sitting out there that we are not using yet,? and suggested waiting on bonds until they are needed.
Commissioner Dan Holub said he definitely favored options that would allow local investment in bonds first.
He also asked that Sheriff Rob Craft, Emergency Communica?tions director Dan D?Albini, and assistant communications director Linda Klenda begin looking into grants to offset part of the construction cost.
Andy Pitts, architect for the project, was unable to attend the meeting because of jury duty. But he briefly talked to commissioners by speaker phone during the meeting.