LISBON - The final piece of the financial puzzle was put in place Wednesday to pay for the new Columbiana County Government Services Building.
County commissioners approved selling the third and final set of government bonds needed to cover the $9.6 million design and construction cost for the two-story, 76,000-square foot building.
County Auditor Nancy Milliken said the bond will be for 40 years and about $7.5 million, with the final figures still being worked out. The bond is expected to be sold in about two weeks.
The financial package had to be reworked after officials learned the county would have needed to use general fund revenue to help make the construction bond payments under the way it was originally structured in 2010, something commissioners were trying to avoid.
The first two construction bonds commissioners obtained to provide the start-up money for the project were for a combined $2.1 million and shorter terms - 23 and 27 years - and the payments were front-loaded, which required higher bond payments over the first 12 years.
Eighty percent of the bond payments were to be covered with money from the rent-paying tenants, with the remaining 20 percent paid from the county's debt service fund, which comes from 0.2-mills in property taxes commissioners are allowed by law to collect. Debt service money is used to make debt payments on county construction projects.
The debt service fund brings in about $300,000 per year, of which $160,000 was obligated to meet existing debt payments. Officials determined that under the original financing plan they would need more than the remaining $140,000 available in the fund to cover all of the bond payments.
This would have forced commissioners to use general operating revenue to help make bond payments. To prevent this from occurring, the Cooperative Extension Office and 4-H Program were added as tenants.
The final piece of the puzzle needed to make the project affordable was being able to sell the third construction bond for longer (40 years) than the other two bonds. Milliken said this was made possible by state Rep. Craig Newbold, R-Columbiana, who was instrumental in getting the law changed to allow government construction bonds to be issued for up to 40 years, thereby lowering those monthly payments by stretching out the debt.
Milliken said they will likely need about $102,000 from the debt service fund to cover the rest of the bond payment. "There will be no cost to the general fund," she said.
The bonds can be paid off early after seven or 10 years, and Commissioner Jim Hoppel said this is always an option, especially if drilling occurs on county property leased for shale gas and oil development.
Deputy County Auditor John Goempel thanked Greg Ewing, a retired investment expert from the Rogers area, who volunteered his services but Milliken decided to pay $20 an hour. Ewing represented the county in its dealings with bond counsel.
"We'd really be in deep trouble without Greg," Goempel said.
"I'm happy to help," Ewing said.