Commissioners approve agreement for county to earn interest from bonds

Published 4:47 pm Sunday, May 20, 2018

The Troup County Board of Commissioners approved an agreement that could help residents get more for their money in the SPLOST that begins in January 2019.

The Troup County Board of Commissioners approved a resolution allowing for an intergovernmental agreement and a bond purchase agreement relating to the issuance of the Troup County Public Facilities Authority’s Revenue Bonds. The agreement essentially makes it possible for the county to earn interest on money from the Special Purpose Local Option Sales Tax using bonds.

“As most of you know, the authority authorized the issuance of this revenue bond for the benefit of the county so that the county can fund various capital projects that were approved in the Special Purpose Local Option Sales Tax,” said Roger Murray, a partner at Murray Barnes Finister LLP. “As part of that transaction, the county is going to agree to pay the authority an amount sufficient to pay the bonds.”

The county will receive interest on the bonds that can be put toward county projects.

“We’ll get about a 2.9 percent interest rate,” County Manager Tod Tentler said. “In past SPLOST, when you get an interest rate like that, you are really making money because you get the projects done now before inflation catches up with them. In the long run, it is really a win-win for the county.”

That investment can result in millions of dollars for county projects.

“For total dollars raised, we raised a little over $10 million,” said Jason Grubbs of The Frazer Lanier Company Incorporated.

“$10 million will be deposited into the project fund. In addition to $10 million going into the project fund, we raised money to pay the first interest payment, which will be due in six months. We are trying to time the proceeds from the SPLOST. Then, we also incorporated all the closing expenses into the financing.”

That money will allow the county to begin work on projects important to the community earlier than would otherwise be possible. The SPLOST that was approved in November 2017 will not begin collection until January 2019.

“It will give us a jump start on a lot of our SPLOST projects that were voted on by the voters last November, like vehicle replacement, gas tanks that have needed replacement and the shop,” Tentler said. “There are some Parks and Recreation projects that we can get jump started on, a fire station, fire trucks, vehicles for the fire department, police vehicles and those kinds of things. It is very needed stuff that we really don’t want to have to wait until January of next year to start.”

The representatives from the companies in charge of the transaction commended county leaders for maintaining a good financial situation in the county.

“My firm, in conjunction with your local lender, Synovus Securities, were engaged to underwrite the financing,” Grubbs said. “I’d like to commend the chairman and the commissioners for the decisions that you guys have made in previous years. It is certainly reflected in the financial condition of the county, and we are very happy and very pleased to report [that] as a part of the financing process.”

Grubbs said that the county’s credit score under Standard & Poor has increased from an A plus to a AA minus. A rating of AA indicates a very strong capacity to meet financial commitments, according to the system.

The Troup County Board of Commissioners is scheduled to meet again on June 5 at 9 a.m. at 100 Ridley Avenue.