Financing alternatives available for the upcoming expansion and remodeling of the St. Francois County 911 Communications Center was the main topic of discussion when the St. Francois County 911 Board of Directors met in regular session Wednesday at The Coffee Grill in Park Hills.
Leading out in the discussion on financing, board member Ginger Taylor reported that the previous month’s sales tax revenue had increased and the board’s financial situation is healthy.
“Our November sales tax collections we received this month were back up again, which is a great thing,” she said. “A total of $278,398, which is good news. Last month was one of the lower ones that we’ve received this year. That 278,000 number was our second highest, so, I was glad to see that. It also puts us over our budgeted amount. If you look at your financial statements, on the comparative revenues and expenses to budget, you’ll see that our current budget for 2016 sales tax revenue was $2.4 million. We are already at $2.545, so we’ve already exceeded that.
“December collections will be received in January, so hopefully we’re going to get around close to where we are averaging, which is somewhere in that $200,000 range. So, we definitely are doing quite well as far as our collections. The sales tax incentives are really, really doing well. Once again we need to thank our county and the public for their support. It’s really made all the difference in the world. It certainly is going to be allowing us to move forward with our project action list in a more aggressive manner than we had originally anticipated.”
Taylor then discussed the securing of financing for upcoming 911 projects.
“I know that the project and the building and facilities committee met a few weeks ago and they were discussing the projected dates of when these projects were going to be started and when they’re going to be completed — what they estimate at this point,” she said. “So, the next step, of course, is securing financing which I think, [Chairman Ron Bockenkamp], you received a copy of what I forwarded to the finance team, as well as yourself on the status of where we stand. Currently, we’re working with two financial institutions — US Bank and First State Community Bank — to secure some financing options in the form of a line of credit, as well as some investment options.
“First State has come back with just a general initial proposal. They have a lot of good ideas in respect to our exempt status and how we can proceed. I know that US Bank is also pursuing those avenues. Their process is a little more complicated because they are a national bank, so there’s a little more red tape there to deal with and people to talk to, so we are aggressively doing that because we want to have a plan of how we’re going to pay for this. Whether we’re going to use current funds that we have available or whether we’re going to have the opportunity to finance a portion of it during the process. We don’t want to get in the middle of a big project like building expansion and then not have access to the funds that we need to get it done.”
Taylor told Bockenkamp that if there were any other financial institutions in the area that the committee wanted her to contact, she would be glad to do so.
“We just started with those two because that’s where our current funds are held — is through US Bank — and First State had also shown some interest in wanting to finance the project. You know, there’s some credibility that comes along with that, as far as working with the 911 board on these projects,” she said. “It basically shows the community their desire to work with us on this level, which is an important thing. Our citizens and our county need to know who the players are and how much willingness there is out there to work with the board on this.”
Bockenkamp noted that Farmington City Administrator Greg Beavers had asked to speak with him and 911 Communications Director Alan Wells about possible financing options following Tuesday’s Public Safety Committee meeting. The chairman asked board member and Farmington Fire Chief Todd Mecey, who accompanied Beavers to the committee meeting, to speak to the board about the city administrator’s suggestions.
“As a tax governmental entity, there are certain rules that we have to follow in the financing, and part of that is that by statute we’re not allowed to commit ourselves to debt in the coming budget year without having an appropriations clause in there,” Mecey said. “If we just go the straight line of credit, we could run into problems trying to meet that statutorial requirement because we don’t believe that there is any way to have the appropriations clause built in there. So, we feel that the best procedure may be to look at a lease purchase agreement. It really doesn’t change at all what Ginger has done to this point other than the fact that we can prepare a boilerplate RFP for a lease purchase versus a line of credit. We can go to all the local lending institutions if we want to, to make sure we have a fair and level playing field.
“One, I think a lease purchase is the easiest way to make sure we’re meeting the statutory requirement. It also allows us to take advantage of tax-exempt financing, which I believe Ginger said that First State had already addressed. Depending on how we approach the financing depends on whether we can take advantage of it. We’re not going to be holding the money that long. It’s not like it’s going to be a 10-year project where we have to worry about our interest rate ostensibly, however, every dollar is every dollar and we need to take advantage of getting a lower interest rate if we can.”
Mecey suggested that the board might also want to pass a resolution for reimbursement so that, if the board decided to finance the entire building project, it would be statutorily allowed to reimburse itself for expenses.
“So, if we were to decide that we wanted to cash the CAD project, or the AT&T project, or the 911 project — any of those — because we got a really good interest rate and wanted to go ahead and stretch it out and use cash for other projects, the resolution reimbursement will allow us to do that,” he said. “I believe our current expenditure was $85,000. We can’t reimburse ourselves for that $85,000, however, if we drafted a resolution then we could do it going forward.”
According to Taylor, the biggest challenge she faced was in determining the timing of all of the expenditures related to the various board projects.
“That’s why I put together this projected completion date on each project specifically, the to-date cost we’ve incurred thus far and how much we’re going to be obligated to commit to over the next 12 to 18 month period of time,” she said. “Because some of these things are going to go quicker than we’re projecting and some are going to maybe go longer than we’re projecting. So, really with the financing piece, that’s just kind of a blanket out there for it if we need it. Not to say that we’re going to have to use it or not have to use it, but we want to make the best use of our funds that we can. Currently we’ve got several million dollars sitting in the bank that we can use these for, but then we have to balance out whether or not they’re going to offer us something on the investment side. What are they going to give us for the money we’re holding currently and what is the cost of that financing going to actually be?”
“Not to say that we’re going to have to use it or not have to use it, but we want to make the best use of our funds that we can.” — Ginger Taylor
Kevin Jenkins is a reporter for the Daily Journal and can be reached at 573-518-3614 or firstname.lastname@example.org