The Marion County Board of Commissioners met in a work session to discuss a Bond Charter Resolution.
The board had previously met on Jan. 31 with David Arteberry, the Public Finance Director for Stifel, Nicolaus & Company to discuss the process and timeline for issuing bonds for road projects. The board and Arteberry discussed the topic at that time but no decisions were made except to hold a future work session.
“Last time I was here we went through the process and talked a little about the mill levy. The action item you have in front of you today is consideration of the charter resolution that would begin the process of actually authorizing you to issue bonds for the project,” said Arteberry.
Arteberry and his associate Mitch Walker explained options that the board has regarding selling bonds to pay for road and bridge projects for the county.
They explained that a charter resolution would exempt the county from the provisions of K.S.A. 68-584 relating to the financing of primary and secondary arterial highways and it would provide substitute provisions so that the county may exercise certain home rule powers and be exempt from acts of the Kansas Legislature.
By approving the charter resolution, the county elects to exempt itself from the provisions of the existing statute and then be governed by substitute and additional provisions. The board will be able to issue the bonds if the board determines that any of the costs incurred or to be incurred by the county in carrying out the provisions in relation to any street, road or highway, should be paid by moneys derived from issuing general obligation bonds of the county. The bonds can be authorized by resolution of the board and may include projects involving one or more streets, roads and highways.
Arteberry explained that there were three options for the county regarding the bonds. The board could approve a resolution authorizing the bonds be published one time in the newspaper, in which case such resolution would become effective after publication and the resolution could contain a provision that if within 30 days after the date of publication of the resolution, a petition in opposition to the resolution, signed by not less than five percent of the electors of the County, is filed with the County Clerk, the county will not have the authority to issue the bonds until the question is submitted at an election called for that purpose or at the next general election. The second option is that the resolution could require that the county not have the authority to issue the bonds at all until the question is submitted at an election called for that purpose or at the next general election. The final option is for the board to publish the charter resolution once a week for two consecutive weeks in the newspaper and take effect 60 days after final publication unless a petition signed by a number of electors of the County equal to not less than two percent of the number of electors who voted at the last preceding November general election or one hundred electors, whichever is greater, be filed in the office of the County Clerk demanding that this charter resolution be submitted to a vote of the electors.
Several of the commissioners expressed their fear that cost of materials and labor continues to rise and they would like to be able to move forward with issuing bonds in order to complete road projects. They discussed that the third option would give them time to get bids and figure out how much would be needed.
Arteberry mentioned the option that instead of issuing long-term bonds right off the bat for projects, they could issue temporary notes which are one or two-year construction borrowing.
“Then when the projects are completed and you know the exact final cost, you then pay off that temporary note with the long-term bond. So if your project costs came in underestimate, you use some of that leftover money for the temporary note to help pay that dividend off and keep the bond issue size smaller,” said Arteberry.
The commissioners expressed concern over what interest rates would be if they went with that option.
The board decided to adopt a charter resolution to be published in the Marion County Record on Feb. 23 and March 2 and then wait 60 days before taking action.