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Budget Committee recommends seeking proposals for bond offering

Budget Committee members voted to recommend the county commission seek proposals for the bond offering with an option to request advisory services.
During their Aug. 16 meeting, Mayor Dan Eldridge listed the four needs that would be met through purchasing eight-to-10-year bonds: $1.8 million for new school buses; $700,000 for asphalt plant equipment; $750,000 for the construction of a solid waste transfer facility; and $1 million for the county’s share of the stream repair from damage incurred during the recent flood.
“We’re looking at a bond offering rather than using capital outlay because of the interest rates,” Eldridge said. “What I need from this committee is direction in seeking proposals from an underwriter.”
Commissioner Joe Grandy asked if an analysis should be requested. “We may not need one with this low of an offering, we just don’t want the same person doing both,” he said.
A financial analyst would provide an independent opinion on the best option for Washington County related to the bonds that would be purchased by the underwriter. The minimum fee for a financial analysis is usually $25,000, and the county’s debt management policy does not require one to be conducted.
“The cost of issuance will be greatly exaggerated by (using services of) an analyst,” Eldridge said, estimating the increase would be equal to two years of interest payments.
Commissioner Pete Speropulos said he thinks the decision is a no-brainer, and the analysis would not be worth the extra expense.
Eldridge offered to contact a financial advisory firm in Memphis about considering a possible discount based on the small size of the offer. “Or maybe they could combine the four needs,” he said. “It would be more reasonable if they could do it all for $25,000.”
Moving ahead on requesting proposals from underwriters could take place while securing an analysis is being considered. “We wouldn’t be limiting ourselves to an analysis by seeking proposals,” Eldridge said. “One does not go before the other.”
Grandy made a motion to recommend soliciting proposals for bonds from underwriters. Speropulos seconded the motion, which passed unanimously.