Joy Hampton
Monday, Feb. 8, 2010 — Rogers County Industrial Development Authority and the County Commissioners will need to pool their resources to build the best courthouse at the lowest possible cost to county residents according to recommendations coming out of the Courthouse Committee meeting this week.
“Time is of the essence,” said Bond Counsel Tom Hilborne. “Interest rates are at an all time low.”
The 11-member courthouse committee was originally appointed by Rogers County commissioners to study the possibility of building a new courthouse and E-911 Emergency Center. Following the endorsement of the voting public through the approval of a one-sixth of a cent county sales tax extension, commissioners asked the committee to continue to work on the project.
The committee is an information-gathering and recommending body only with all decisions resting with the Board of County Commissioners. Commissioner Kirt Thacker, Claremore Police Chief Mickey Perry, Sheriff Scott Walton, Judge Sheila Condren and a variety of members of the private sector serve on the committee.
Judge Dwayne Stiedley had also served on the committee but offered his resignation through letter this week citing a potential conflict. Stiedley’s son, attorney Larry Stiedley is the RCIDA attorney. For a brief time, there was some appearance of discord between county commissioners’ legal council and Stiedley on behalf of their respective clients.
Clarifications discussed at the recent courthouse committee meeting have hopefully eliminated any misunderstandings. The two entities benefit through working together, according to information gathered at the meeting.
District Attorney Gene Haynes and Assistant District Attorney Barry Farbro were in attendance on behalf of the county commissioners. Farbro is the special counsel contracted to work exclusively with the commissioners.
Hilborne and Financial Advisor Greg Nieto are currently seeking underwriters for the bond project which will allow the county to build the courthouse and E-911 center.
Two primary issues under discussion include the need for a vehicle through which the bond money will flow and for resources to boost the credit rating of the county. Cooperation between RCIDA and county commissioners acting on behalf of the county is crucial to achieving these ends with the best possible result to taxpayers according the committee’s recommendation.
Bonds must be administered through a tax-exempt authority such as RCIDA said Hilborne and Nieto. RCIDA has administered school bonds and has a proven track record. That will mean lower interest rates and a savings to taxpayers.
Committee member John Baker said he is concerned about running the money through RCIDA.
“RCIDA has little if any oversight,” said Baker, who also expressed a concern for as much transparency as possible.
Hilborne and Nieto said transparency and oversight should not be issues.
Technically, RCIDA would be a “flow-through” or clearinghouse entity. The trusty bank would oversee the cash, the state requires audits, and all ownership would remain with the county, meaning the county commissioners would have oversight.
Establishing a new authority to administer the bonds would mean a minimum delay of four to six weeks at best. In that time period, interest rates could go up, costing the taxpayers potentially millions.
“It’s going to slow the wheels down (if a new authority is established),” said Hilborne.
“We are transparent,” RCIDA Executive Director Don Cochran told the Progress. Cochran was unable to attend Wednesday night’s meeting, but several members of his staff and RCIDA Board Chair Steve Savage were present.
Savage made it clear RCIDA wants to cooperate with the county. Cochran said like any other entity, all official documents and financial reports by RCIDA are subject to open information laws.
“We provide monthly reports, a yearly report and a yearly audit to the county commissioners, and we file those with the county clerk also,” said Cochran.
Those documents are part of the public record and open to scrutiny at anyone’s request as are all county financial records.
Also at issue is money to be pledged to the bonds in order to receive a favorable credit rating and therefore lower interest rate.
The one-sixth of a cent county sales tax pledged to build the courthouse is almost enough funding but not quite. Around $400,000 more annually will be needed to pay off that debt. Half of that money, or $200,000, is expected to come from the county’s general fund. The other half is to come from the use tax that funds RCIDA. Instead of RCIDA receiving 100 percent of the use tax as they do now, the $200,000 would be used for the courthouse and the rest could be retained by RCIDA.
All or most of the money from the use tax is needed as a pledge to get the best interest rates. In any case, money contractually obligated to RCIDA cannot be used as part of the pledge.
Furthermore, though next year’s contract between RCIDA and the county is likely to be terminated by the Board of County Commissioners, there is currently a contract that obligates that money to RCIDA.
The county can still fund RCIDA through either a resolution or next year through appropriations, but any money obligated by the contract cannot be pledged to the security of the bond said Haynes.
“Regardless of whether or not they use any RCIDA funds, the contractual obligation needs to be canceled,” said Haynes. “The current contract will automatically renew July 1 unless it’s terminated prior to that.”
Cochran said it is his understanding that the commissioners renew the contract annually.
Right now, there are five months remaining on the current contract between the county and RCIDA
The county commissioners have the power to terminate next year’s contract, said Haynes, but they do not have the power to terminate or amend the current contract. To leave the contract in place as is will delay the bonding process.
“You’ve got to change that existing contract,” said Hilborne.
Haynes said RCIDA would have to agree to terminate or amend the contract.
Hilborne said interest rates are so low that no one believes they will go down any further. An increase of even a small percentage would potentially cost the county, and thus its taxpaying citizens, over a million dollars.
The courthouse committee is recommending that the existing contract be amended to allow that money to be pledged to the courthouse project.
Commissioners will consider and likely take action on the committee’s recommendations at Monday’s meeting.
RCIDA has not yet scheduled a special Board meeting to deal with the contractual issues, but officials at that entity say they will cooperate in order to serve the residents of Rogers County.
“We don’t owe anybody,” said Cochran. “We keep our bills paid.”
Previously, RCIDA has worked with the county for the greater good.
“Last year we gave the county approximately $70,000 to help on projects like the county assessor’s mapping system and the INCOG dues,” said Cochran. “Some of that money also supported the new county logo.”
“On behalf of the committee I want to thank all of those who have come together and worked for the common goal of the much needed new courthouse and emergency 911 center,” said Co-chair Bill Higgins. “The committee is confident that the county commissioners and RCIDA will work for the best interests of the citizens of our county.”
