By Catharin Shepard • Staff writer • The Hoke County Board of Commissioners reviewed possible financing options for county construction projects at the regularly scheduled board meeting last week.
Representatives for the Davenport and Company firm presented a debt affordability analysis for projects including a new county courthouse and funding for a SandHoke School of Engineering.
Mitch Brigulio of Davenport and Company, which has served as financial counsel for the county for a number of years, discussed the analysis.
“We’ve been working with staff over the last several months to analyze the debt capacity and debt affordability of some of the capital projects you all are considering, and wanted to report back to you all tonight,” he said.
The county’s credit score as a municipal government is fairly good, just a few steps below the highest levels, according to the report.
“You all are in very good company, you have a good credit rating which will provide you all access to the capital markets to consider financing projects if that’s what you choose to do. You’re starting from a position of strength in regards to your credit rating,” Brigulio said.
Overall the county has done a “very nice job” of building up its fund balance since 2015, putting it in a good position to be able to consider capital projects, he added.
The analysis looked at possible scenarios for financing three different projects: the James A. Leach Aquatics and Recreation Center, a new courthouse and the SandHoke School of Engineering. Only the aquatics center is fully in development at the moment, with construction in the early phases at the new site near East Hoke Middle School on U.S. 401. The other two projects are still under discussion.
The Davenport assessment assumed an estimated cost of $19.1 million for the aquatics center, $44.2 million for the courthouse and $14.3 million for the engineering school, though those numbers may not be exact.
To borrow money at a four percent interest rate to pay the total $66.7 million for all three projects – if the county were to use no other funding sources – the total financing package would cost $92.4 million, with an expected payoff date of 2042. The full amount would be equivalent to a roughly 14.3-cent property tax requirement, according to the documents.
It’s not likely the county would use financing to fully pay for all three projects, commissioners have discussed. Instead the board could look to pull in money from existing county funds, pursue grant funding, seek out tax credits where available and potentially secure some money from the state to cover the costs.
The county could also take other steps that wouldn’t increase property taxes, such as a quarter-cent sales tax increase (if approved by voters), using school lottery proceeds if available to help pay for the engineering school construction or rely on additional revenue generated from the future 2023 property revaluation, the Davenport assessment noted.
Commission Chairman Harry Southerland pointed to the county’s growth in comments after the presentation.
“We are, first of all, the third-fastest growing county in the state. That may change, we might be number one or number two, because we are growing rapidly, and that’s a good thing as long as we do smart growth. So we have to make some changes, we’re going to have to build some buildings and do some capital projects, because our county needs that. And we owe it to them to get this school of engineering going, to get this courthouse up and also to bring us the aquatics center. We’ve got many more things on the way, but we’ve got to make some major decisions in the near future,” Southerland said.