Story originally printed in the Tomah Journal or online at www.tomahjournal.com
Published - Monday, November 17, 2008
Borrowing rejected, county looks at options
Monroe County’s application to borrow $2 million was rejected by the State Trust Fund after failing to meet state requirements. With the rejection of the loan, the Monroe County Board Finance Committee put together an option to pay the initial architect costs for a new justice center on Thursday, which still awaits approval from the Public Safety and Justice Committee and the County Board.
The Monroe County Board voted to apply for a loan with the State Trust Fund to pay Venture Architects for initial costs on a $30 million justice center project on Nov. 5. After the loan was rejected, the Finance Committee voted to send a resolution to the County Board to take $100,000 from the county’s General Fund, $100,000 from the county’s Contingency Fund, and another $100,000 from the Jail Assessment Fund to pay Venture. The committee also stipulated that the money used from the General and Jail Assessment Funds will be paid back through financing.
The county can also use a $100,000 credit from Venture for a previous payment. The County owes Venture $425,000, and would seek other options to pay project costs for a new justice center in 2009.
The use of money from the Jail Assessment Fund still needs to be approved by the Public Safety and Justice Committee, which last met on Wednesday. If the committee is unable to hold a special meeting before the November County Board meeting, the resolution will most likely go before the board in December, should the Public Safety and Justice Committee approve it. The resolution would require a two-thirds vote of the County Board for approval.
Brad Viegut of Robert W. Baird and Co., who serves as a financial consultant to the county, told the Finance Committee on Thursday that the State Trust Fund loan was rejected because it did not meet state requirements.
“The state is telling us that the resolution required a three-quarters vote to be approved,” Viegut told the board.
The resolution authorizing a State Trust Fund loan application required a super majority vote, Viegut told the committee. A successful referendum would also be valid. Before the resolution went to a vote on Nov. 5, the issue of whether the resolution could be passed by super majority vote was raised, but Monroe County Corporate Counsel Kerry Sullivan-Flock told the board after some discussion that only a simple majority was needed. Viegut also did not know of the super majority requirement, partially because a super majority had already voted in February to bond for a $30 million justice center, and at the time there was no consideration to borrow from the state.
February’s bonding resolution did not include a citation of the relevant chapter of state statutes, which is needed for borrowing from the State Trust Fund, Viegut told the Finance Committee. With no mention of the chapter in the original bonding resolution, a super majority was also needed for the new resolution to borrow from the State Trust Fund, which passed 12-11.
The County Board had originally planned to pay for the Justice Center by bonding for $2 million in 2008, $18 million in 2009, and $10 million in 2010. An unfavorable economy and a lack of bidders caused the county to pull a resolution to bond for $2 million this year and borrow it instead from the State Trust Fund at an interest rate of 4.5 percent. The county would also be charged $15,000 by Robert W. Baird and Co. for administering the loan application. Baird has also been aiding and advising the county board with financial consulting throughout the project. With the rejection of the loan, the $15,000 will not be charged.
“There is no fee for Baird because there is no financing,” Viegut said. “I don’t see this as an issue at this point, because (the county is) not going to be charged.”
All stories copyright 2006 Tomah Journal and other attributed sources.