Friday, August 28, 2009
THE GUARDIAN keeps hearing Canyon County Commishes can get $18 million in Obama stimulus money for their jail project. The reality is that won't happen. Commissioner Alder agrees with THE GUARDIAN that the presentation of how this works did not go over very clearly at the Tuesday jail bond meeting.
What they will get is the right to purchase $18 million in non-tax exempt bonds and the federal government will give them money to buy down the interest rate on the $18 million to the tune of 45% of the non-tax exempt interest rate on the bonds.
Is this a win situation for the county Commishes? The real answer lies in what tax exempt bonds are selling for and the difference between the two. The spread on the interest charges in not something to get excited about. It may be cheaper to go with tax exempt bonds.
All money received under the stimulus plan will go to pay bond interest. Bankers will get the money and none will go for the project.
Stimulus money presentations were very unclear at the Tuesday evening jail meeting and I hope this post clears up how stimulus money would apply to financing the jail project.
Posted by Paul Alldredge at 12:24 PM