Thursday, April 16, 2009
It has been reported to The Guardian our Canyon County Commishes meet with Eric Herringer of Seattle Northwest Securities last Thursday about underwriting bonds to build a new jail. $50 million is the figure tossed around for public consumption.
The Guardian obtained a recording of the meeting today and below is a summary.
Commishes are looking at August 2009 to float a bond election for a new jail. The cost of the election will be in the neighborhood of $50,000.00. There is no money budgeted for this election at this point in time. They want the August date so they can fold the increased levy rate into this years tax bills if the bond election passes by 2/3rds majority.
Higher interest rates will be absorbed by Federal (our tax dollars) Obama Stimulus money. Not only will we get to pay locally but on a national scale as well for this effort. The spin names for these bonds are RECOVERY ZONE BONDS (RZB's) subsidized at 45% of the taxable interest rate and BUILD AMERICA BONDS (BAB's) subsidized at 35% of the taxable interest rates.
Underwriting costs (sales profit) and legal fees (lawyers) will run about $1 million or more if this gets past voters. More costs will apply if the county tries to get an enhanced bond rating from A to AA.
$10 Billion is out there from the federal government on a first come first served basis for the RZB/BAB bond subsidies.
Tax free municipals carry about a 4.5% tax free interest rate. Taxable bonds around 7%. Interest rates change daily and you would have to apply the subsidy rates to arrive at the actual interst.
Posted by Paul Alldredge at 8:21 PM