During its Tuesday night regular meeting, the Franklin County Fiscal Court had the first reading of an ordinance that would authorize the issuance of a general obligation bond for up to $8 million.
The funds from the loan would be used for the construction of a new building for the county road department off Lewis Ferry Road.
Keith Brock, a senior vice president for Compass Municipal Advisors out of Lexington, was on hand to answer questions about the bonding process.
"The process of obtaining financing of any sort is a process that has several steps involved," Brock told the magistrates. "I think what's before you today is an ordinance that would be necessary in order to authorize and approve the financing process to move it forward and from that standpoint, that allows us to move forward in what we call the execution phase of that, where we could then go out and sell bonds to obtain the capital that would ultimately fund your projects."
Judge-Executive Huston Wells noted that the second reading and vote on the ordinance would be scheduled for a special meeting on Monday so that it could be presented to the Department for Local Government (DLG) for approval before it meets for the last time this year. In doing so Wells said the county stood to save more than $200,000.
4th District Magistrate Scotty Tracy asked Brock how the bonds are going to get approved for the $8 million without a final estimate on the total cost of the project.
Brock conceded that ordinarily the final project cost comes before procuring financing.
"So in this case, the risk — and this has to be crystal clear — is that you have to intend to spend $8 million on the project," Brock answered. "So if that is a concern then we would need to reevaluate this strategy. If that is not a concern then you are effectively hedging your interest rate risk by locking in a portion of your capital today at known rates and you're just dealing with that other piece for the rest of the project at a later date."
Wells then added that the borrowing amount was capped at $8 million as opposed to being the exact amount to be borrowed.
Sixth District Magistrate Lambert Moore pointed out that things needed to be decided sooner rather than later so that contractors could order materials, which takes around six months to be delivered.
Tracy responded that he thinks they need an estimate first, noting that the contracted design firm OHM Advisors was estimating a $7 million cost for construction.
"I think we have $4.75 million budgeted for a new road facility," Tracy stated. "We asked them when they were in front of this court and at the road committee, 'Guys, we need you to go back and look at ways to reduce the cost and come back and see us.'"
Tracy went on to note that he has not seen a revised budget.
Tracy said, "... it is obvious that we are going off what we were presented the first time and we are almost double what we had originally budgeted."
The discussion on the bond ordinance went on for more than an hour with several magistrates asking questions about the timing and prudence of the spending measure.
"How do we sign an $8 million bond with a lot of questions?" 3rd District Magistrate Michael Mueller asked. "I would love to see it go back to the [road] committee next week to start talking about it and figure some stuff out. I would love the road crew to go back and get some answers from OHM with the treasurer. If we only have $4.6 million, that is a big gap there."
Once again it’s the newer Magistrates making logical decisions - not a salesman using CJE Wells as a puppet, telling them what to do. I certainly appreciate the magistrates vigilance.
State-Journal.com’s comments forum is for civil, constructive dialogue about news topics in our community, state, nation and world. We emphasize “civil” at a time when Americans, in the words of the current president, need to “turn down the temperature” of political debates. The State Journal will do its part by more carefully policing this forum. Here are some rules that all commenters must agree to follow:
Absolutely no attacks on other commenters, on guest columnists or on authors of letters to the editor. Our print and online opinion pages are sacred marketplaces of ideas where diverse viewpoints are welcome without fear of retribution. You may constructively critique the ideas and opinions of others, but name-calling, stereotyping and similar attacks are strictly prohibited.
Leeway will be given for criticism of elected officials and other public figures, but civility is essential. If you focus your criticism on ideas, opinions and viewpoints, you will be less likely to run afoul of our commenting rules.
Keep comments focused on the article or commentary in question. Don’t use an article about the Frankfort City Commission, for example, to rant about national politics.
Hyperpartisanship that suggests anyone on the other side of an issue or anyone in a particular particular party is evil is not welcome. If you believe that all Democrats are socialists intent on destroying America or that all Republicans are racists, there are lots of places on the internet for you to espouse those views. State-Journal.com is not one.
No sophomoric banter. This isn’t a third-grade classroom but rather a place for serious consumers of news to offer their reactions and opinions on news stories and published commentary.
No consumer complaints about individual businesses. If you’ve had a bad experience with a private business or organization, contact the Better Business Bureau or the government agency that regulates that business. If you believe the actions of a private business are newsworthy, contact us at news@state-journal.com and we will consider whether news coverage is merited.
Absolutely no jokes or comments about a person’s physical appearance.
No promotion of commercial goods or services. Our outstanding staff of marketing consultants stands ready to help businesses with effective advertising solutions.
If you state facts that have not been previously reported by The State Journal, be sure to include the source of your information.
No attacks on State Journal staff members or contributing writers. We welcome questions about, and criticism of, our news stories and commentary but not of the writers who work tirelessly to keep their community informed. Corrections of inaccurate information in news stories should be sent to news@state-journal.com rather than posted in the comments section.
Post a comment as anonymous
Report
Watch this discussion.
(1) comment
Once again it’s the newer Magistrates making logical decisions - not a salesman using CJE Wells as a puppet, telling them what to do. I certainly appreciate the magistrates vigilance.
Welcome to the discussion.
Log In
State-Journal.com’s comments forum is for civil, constructive dialogue about news topics in our community, state, nation and world. We emphasize “civil” at a time when Americans, in the words of the current president, need to “turn down the temperature” of political debates. The State Journal will do its part by more carefully policing this forum. Here are some rules that all commenters must agree to follow:
Absolutely no attacks on other commenters, on guest columnists or on authors of letters to the editor. Our print and online opinion pages are sacred marketplaces of ideas where diverse viewpoints are welcome without fear of retribution. You may constructively critique the ideas and opinions of others, but name-calling, stereotyping and similar attacks are strictly prohibited.
Leeway will be given for criticism of elected officials and other public figures, but civility is essential. If you focus your criticism on ideas, opinions and viewpoints, you will be less likely to run afoul of our commenting rules.
Keep comments focused on the article or commentary in question. Don’t use an article about the Frankfort City Commission, for example, to rant about national politics.
Hyperpartisanship that suggests anyone on the other side of an issue or anyone in a particular particular party is evil is not welcome. If you believe that all Democrats are socialists intent on destroying America or that all Republicans are racists, there are lots of places on the internet for you to espouse those views. State-Journal.com is not one.
No sophomoric banter. This isn’t a third-grade classroom but rather a place for serious consumers of news to offer their reactions and opinions on news stories and published commentary.
No consumer complaints about individual businesses. If you’ve had a bad experience with a private business or organization, contact the Better Business Bureau or the government agency that regulates that business. If you believe the actions of a private business are newsworthy, contact us at news@state-journal.com and we will consider whether news coverage is merited.
Absolutely no jokes or comments about a person’s physical appearance.
No promotion of commercial goods or services. Our outstanding staff of marketing consultants stands ready to help businesses with effective advertising solutions.
If you state facts that have not been previously reported by The State Journal, be sure to include the source of your information.
No attacks on State Journal staff members or contributing writers. We welcome questions about, and criticism of, our news stories and commentary but not of the writers who work tirelessly to keep their community informed. Corrections of inaccurate information in news stories should be sent to news@state-journal.com rather than posted in the comments section.