Newton County supervisors are set to receive $5 million in funding for road projects by the end of the month.
In the June 18 meeting of the Newton County Board of Supervisors, the board opened three bids it received for the $5 million bond issue facilitated by Butler and Snow law firm.
Bids were received from Duncan Williams and Financial Capital Markets, both out of Memphis, and Crews and Associates, out of Little Rock. Troy Johnston, an associate with Butler and Snow, said the interest rate and premium from Duncan Williams looked to be the best option for the county.
“It looks like Duncan Williams is the lowest,” he said.
The $5 million bond issue set at a 20 year term was offered by Duncan Williams at an interest rate of 2.182505 percent. The total interest due over the life of the bond would be $1,268,774.79.
Johnston told the board that would amount to annual costs of roughly $312,000 for Newton County, with the first payment due July 1, 2021.
The Board of Supervisors intends to use internet use tax revenue to cover the cost of the bond, which would allow the county to pay back the money without raising taxes. However, the use tax collections are expected to exceed the annual bond payments, and supervisors are also considering paying the bond off early with the additional funds.
Under the bond repayment terms, Johnston said the earliest the county would be allowed to pay off the bond entirely would be July 1, 2029. If the use tax were to fall short or be reallocated by the Legislature, Newton County would need to find another way to make the payments.
The board voted to accept Duncan Williams bid and move forward with the bond. Johnston said it would take a few weeks to handle the details, but the board would receive its money by the end of the month.
“We’re going through and validation process, and in a few weeks, we can close,” he said. “You’ll have your money June 30.”
Johnston reminded the board the bond terms allow for the money to be spent on supplies and equipment, including contractor bids, for road projects and can be used to reimburse the county’s five beats for qualifying expenses made 60 days prior to the bond’s closure. However, he said, the money cannot be spent on payroll for county employees.
Supervisor Charles Godwin suggested the board pass a formal motion at a future meeting to declare its intentions to pay the bond off at the 10 year mark. He said he wanted the public and future board members to understand how supervisors were planning to handle the debt.
