Bruce Schwartzman, BKV Group, and Pete Filippi, Contegrity Group, addressed the Fillmore County Board at their April 4 meeting. Chairman Larry Hindt was absent due to a medical issue.
Schwartzman explained that the jail project went out for bids in February; the bids came in on March 23. There was good bid coverage with 25 bid categories and 57 bids total. Two categories didn’t receive bids: overhead doors and tile. The total base construction cost estimate came in about $500,000 over their estimate at $8,618,231, which Schwartzman felt was good considering the economic conditions at this time. Filippi said they will recapture as much sales tax as possible.
Schwartzman suggested costs are leveling out, but not getting cheaper. The total project cost with county contingencies and soft costs is $10,565,676. This does not include building maintenance items for the existing building which total $310,022. An extra item being considered that is not in the total is a Training Room Addition which is estimated to cost $391,130.
County Administrator Bobbie Hillery noted the county’s last bond payment on a 2010 bond is due February 2, 2024. This will complete the only outstanding bond the county has. She added $150,000 is put aside each year for building maintenance. Commissioner Mitch Lentz noted this maintenance funding can be used to pay maintenance items on the existing building. But, he said, the maintenance costs could be added into the bond if preferred.
Hillery explained, if the total cost plus the training room addition were taken together minus the American Rescue Plan Act (ARPA) of 2021 funds totaling over $4 million, the total to be bonded would be $6,505,000. The additional bond payment (minus the current bond payment which will be paid off) will be about $247,000, which will add two percentage points to the levy. The levy increase last year was 3.99%. Commissioner Duane Bakke said that will be a 50% increase in the levy.
Hillery noted there could be other options for funding. Bakke reported that a number of counties and cities in Minnesota want a sales tax implemented to help fund local projects. This will need approval from the legislature first and then a proposal will be subject to a referendum in order to implement a local sales tax.
Another option is state funding. Schwartzman said this will add about 9% to the cost due to items required by the state. Bakke said he didn’t believe local projects should be bonded with state money.
Commissioner Randy Dahl made it clear that he was in favor of moving forward with the project. Lentz, a member of the jail committee, said the committee recommendation was to move forward with the project. Dahl moved to approve the committee recommendation and Lentz seconded the motion.
Bakke said he preferred the full board vote on an issue of this importance. He suggested they look into funding methods further. Hillery admitted this will reduce county reserves; some departments are already operating with bare bone budgets.
Commissioner Marc Prestby commented that this is quite a commitment; he agreed with Bakke that the full board should vote on it. Lentz insisted Hindt was on the committee and would recommend moving forward.
Bakke asked that Hillery analyze the finances more, and any alternative finances. Dahl made a motion to lay his motion on the table until the next board meeting. The motion was approved. Lentz asked that financial advisor Mike Bubany be scheduled for the next meeting to explain the bonding schedule. Bubany had provided some written information for today’s meeting. He estimated a net effective rate of 3.6% on a 20-year term; this would be an average yearly payment of $493,000, or an additional $247,000 over the county’s current bond payment. Spread out among all taxpayers in the county it could create a property tax increase of $4.52 for the owner of a $75,000 single-family home to a $120.43 increase to the owner of a non-homesteaded farm valued at $2 million.
Other business in brief
• Sheriff John DeGeorge requested approval to purchase equipment for three new squad cars and a transport/squad van. He said due to the fact that ordered squad cars have not always been delivered, they are waiting to order equipment for the new vehicles until they know they are being built. He added they will reuse everything we possibly can. The board approved the purchase of equipment for the four squads from Emergency Automotive Technologies, Inc. (EATI) in the total amount of $49,633.08. This will cover stripping out old equipment from squads being sold to installing equipment into the new squads.
• Approval was granted to close out a small Courthouse Coffee Fund bank account at F & M Bank which has been dormant. The funds will be transfered to the Wellness Fund.
• The 2022 Abatement summary of 14 abatements totaling $37,618 was reviewed.
• An updated service agreement with Dynamic Lifecycle Innovations was approved. This is for the recycling of TVs, monitors, laptops, and other electronic and battery containing devices.
• The county board meets next on April 11.