Newton County supervisors are moving forward with a plan to issue $5 million in bonds to upgrade and repair county infrastructure throughout the five beats.
In a meeting Monday, Troy Johnston of Butler Snow Law Firm presented two resolutions to the board to move the bond issue forward.
“The first one is an engagement resolution to engage Butler Snow and [County Attorney Jason Mangum] to go ahead and take the action necessary to start the bond issue,” he said. “Second is a resolution of intent that you’re required to do to notify the public that you’re going to actually issue bonds.”
The Board of Supervisors began looking at a potential bond issue earlier this year after counties and municipalities began receiving their portions of the internet use tax, a sales tax collected from online sales that was earmarked by the legislature for local road and bridge projects. The use tax is set to be phased in over a 4-year period, with Newton County receiving close to $500,000 per year once the tax is fully implemented.
In a March 19 meeting, the Board of Supervisors agreed to begin the procedure to issue the $5 million bond after confirming the bond payment could be made with the use tax and would not require additional taxes to be levied.
“These are general obligation bonds,” Johnston said. “You’ve got money coming from the infrastructure money. You could use that money because this is road and bridge money. And there’s other money that y’all have in the county you could use.”
For a $5 million bond at 3.5 percent, Johnston said, the county would be looking at payments of approximately $352,000 per year over a 20-year period. A 15-year period, he said, would raise the payments to about $432,000.
Under the current economic conditions brought on by Covid-19, however, the bond market is fluctuating, and the interest rate might not be 3.5 percent, Johnston said.
“The bond market is crazy right now,” he said.
After approving the two resolutions Monday, Johnston said the Board of Supervisors would be required to publish the resolution of intent and allow residents the opportunity to file petitions against the bond issue until May 18. After the deadline for petitions passes, assuming there are none, the board will have a chance to see where the bond market, and potential interest rate, is before committing the county to the plan.
“We’ll do a bond revelation, and then we’ll look and see what the market is,” Johnston said. “Right now, I think you’re looking at 2.5 to 3, maybe 3.25 percent. But that may change overnight.”
In other infrastructure business, County Engineer Duane Stanford told the board Newton County had about $2 million in combined State Aid and Local System Bridge Project (LSBP) funds that needed to be put to use.
Stanford urged supervisors to approve programs, which are written plans for infrastructure projects, to tie the funds to Newton County. Without a program attached, he said the state may come in and reclaim the money.
“I’ve got four programs written up,” he said. “All it does is appropriate the money for bridges and roads.”
Of the $2 million, about $200,000 is LSBP funds, which Stanford’s programs called to be put toward two bridges on Pine Ridge Road in Beat 4. The estimated cost for the bridges was $699,000; however Stanford said the state had said it would make additional funds available out of reclaimed LSBP funds taken from counties that failed to find projects for it.
The remaining $1.8 million is State Aid funds. State guidelines state only 40 percent of State Aid funds can be put toward roads. The remainder must go to bridges, Stanford said.
His projects put 40 percent, $720,000, toward repairing, resealing and restriping roads throughout the county. The money would be enough to cover approximately 13.5 miles of road.
The rest of the money was programmed to repair bridges on Hickory Fellowship Road in Beat 5, which cost $466,000 and Pleasant Ridge Road in Beat 5, which cost $525,000.
Programs are not final projects, Stanford said, and the Board of Supervisors could easily go back and reallocate the money to other projects at a later date. All the programs do, he said, is tie up the money so it cannot be reclaimed.
