During a joint session of the Pulaski County Council and Commissioners, a presentation was given for the possible issuance of bonds for upgrades and repairs to the courthouse. The County is currently analyzing the courthouse building before bidding architectural work for the upgrades.
Jason Semler with accounting and financial firm Umbaugh and Associates says tax rates would be expected to increase for a period to compensate for the additional debt.
“For $6-million of projects, you’d be looking at a $6,200,000 bond issue,” says Semler. “Your annual payment would be about $755-thousand if you do a bubble, anywhere from $620-thousand to $880-thousand if you delay it. Your combined tax rate would be anywhere from 9-cents to 10-cents.”
Under the analysis, Umbaugh and Associates presented bond schedules for an issuance between $2-million and $6-million. Principal and interest change depending on the project scope.
Pulaski County anticipates courthouse upgrades to cost in the $6-million range. Semler says at that cost, it would be advisable to receive an upgraded bond rating.
“If we did a $2-million bond issue, that small, we probably wouldn’t get a bond rating because it costs an extra $10-thousand to $15-thousand for that rating and the amount of savings possibly wouldn’t justify paying that extra expense, but if you’re looking between $4-million and $6-million, that’s when we’d want to look at your financials,” says Semler.
If the project exceeds $2-million, Pulaski County will likely use lease financing, similar to past projects related to the Pulaski County Justice Center’s Construction. Indiana allows for up to 2-percent of the county’s net assessed value to be borrowed against.
No decisions were made. Courthouse analysis is anticipated to be completed in January