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Trainer suggests $9.5 million bond for roads

February 4, 2012


District 5 Supervisor Joe Williams’ opinion on economic development is simple: Build the infrastructure, and housing development will come.
Both Williams and District 2 Supervisor Orlando Trainer say they are hopeful the Oktibbeha County Board of Supervisors will continue discussions toward obtaining funding streams to support county development projects during the group’s 10 a.m. Monday meeting at the county courthouse.
Currently, Oktibbeha roads are at their most important time of need, Williams said, and the lion’s share of construction can be completed in a timely manner if the board finds a creative way to acquire funding.
“You’ve got people out in the county waiting for almost 50 years for a paved road, while some people have to go drive through standing water just because we don’t have the money to take care of flooded areas. It’s definitely a quality of life issue and an economic development issue,” Williams said. “Once we pave these roads out in the county, people are going to want to move out there. The best economic developments, in my opinion, are housing and quality of life development. If we provide the infrastructure, people are going to move here, shop, buy groceries, spend their money and raise their children.
To fund these infrastructure and quality of life projects, Trainer said the board could investigate issuing bonds in the same manner as Lauderdale County. In a draft for a $10 million general obligation bond for Lauderdale County provided by Trainer, the county uses language to specify funding for road, highway and bridge construction, materials, right-of-way acquisitions, equipment, repairs and improvements to county buildings, recreational facilities, parks and related facilities.
Trainer said Oktibbeha County could seek a bond for $9.5 million over 12 years at 3.25 percent interest to fund its own projects. No formal action has been taken by the board to secure such a bond. The bond’s impact, Trainer said, is approximately 3 mills, but the county budget could be reorganized to lower the need for a millage hike or possibly negate the need all together.
“Lauderdale (County) does this type of issuance regularly at the beginning of each board term. The county has it set up so a bond is typically rolling off at that point, creating a level, known need,” Trainer said. “A possible issuance over 12 years would allow us to do a variety of things. We can use a lot of the money for infrastructure projects which we could see at least an eight- to 10-year life expectancy.”
By wording the possible bond with language similar to Lauderdale County’s, both Trainer and Williams say it will grant supervisors flexibility for district-specific projects a simple road bond would not allow.
“Some supervisors do not have as many rock roads as some districts have. Each district is different,” Williams said. “District 5 might have a need for other projects. For example, some of the citizens in my district have asked for a community center. (Flexible language) allows us to look at what our needs are in each district and what our citizens want.”
As for funding bond payments, Trainer said budget reallocations are possible. If issued, a mixture of reallocations could offset the need for a full 3-mill hike. Supervisors can also shuffle funding as smaller notes roll off the county books, he said.
“We’ve got the capacity to do some things outside of the box by acquiring funding through our existing cash flow. We can look at our overall budget and consider everything besides employees’ salaries because the option of laying off county employees is not on the table,” Trainer said. “With reorganizing money, you’re not robbing Peter to pay Paul. You’re actually moving money around. If we have our road funding through a bond issue, we can take the money we typically set aside for materials and projects each year and use that to help make payments.”
Trainer said current interest rates are lower than when the board last tried to issue a bond of this nature.
“I’ve already talked to our financial advisors. The first time we tried something like this the interest rate was approximately 4.5 percent in 2009 for various amounts,” he said. “The market is very good right now; it gives us a great opportunity to really tackle our road plan.”
Issuing a notice of intent to seek a bond issue, Trainer said, is the county’s first step toward beginning the process and will also provide feedback from taxpayers.
“A notice alerts the public to our intentions and allows us to gauge interest. I want the opportunity to show the taxpayers all of our options,” Trainer said. “We’re hopefully going to talk about this issue (Monday) and see if we can get supervisors to decide the first step we need to take.”

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