Debt options outlined for Seneca County Courthouse

2/10/2009

TIFFIN - A bond consultant urged the Seneca County commissioners Monday to save their $5.5 million in borrowing authority and let one of the regional port authorities take on the debt to renovate the Seneca County Courthouse.

Jerry Arkebauer, a private consultant working with the Seneca County Courthouse Development Group that is trying to save the local landmark from demolition, laid out three options.

The first option - issuing $5.5 million in general obligation bonds - would get the best interest rate because of the county's A-rating. But it would tie up the county's nonvoted bonding capacity, Mr. Arkebauer said.

The second option is to use sales tax revenue bonds, which would have first claim on a major source of county tax revenue.

A third option, which Mr. Arkebauer recommended, is to deed the courthouse over to the Sandusky County-Seneca County-City of Tiffin Port Authority and then have a port authority such as the Toledo-Lucas County Port Authority issue bonds. The courthouse would be leased to the county for the 20 years of the bond payback, at the end of which the county could buy it back for $10,000.

In December, the courthouse development group estimated the lease at $41,715 a month for 20 years in a best-case scenario involving a $7.3 million cost with $3.2 million in state, federal, and private grants, and up to $74,412 a month as a worst-case scenario if the port authority could not obtain grants.

Mr. Arkebauer, who retired in 2006 from the Toledo-Lucas County Port Authority, noted that the county can use its bonding power for capital expenditures on buildings, equipment, and basic infrastructure.

"If you elect to go to the general obligation bond on the courthouse then you will not have any capacity to do those other projects," he said.

At issue is what to do with the 1884 courthouse that sits at the center of this city about 50 miles southeast of Toledo. In 2004, the county moved the clerk and judges into an annex next to the courthouse.

Preservation consultant Franklin Conaway, head of the development group, is to make a presentation to the commissioners Thursday with conceptual drawings and cost estimates.

Ben Nutter, president of the board of commissioners, said he believes the price will be closer to $10 million than $7.3 million, after necessities like a connector and security are included. He said if the renovation can't be done for about $6 million, he won't support it.

"But if in six months you haven't secured the funding to make those numbers basically the same then I'm not for it," Mr. Nutter said. "We have limited resources and we have to be careful how we commit them."

And he said he would prefer to use the county's bond authority as the cheapest route, and to avoid complications over transferring ownership.

"The real debt limitation that we have is ability to pay, so sort of skirting the unvoted debt limitation isn't particularly helpful, because we wouldn't be able to make the payments on that without some type of increase in revenues," Mr. Nutter said. "I'm very confident the most inexpensive way to do that is to issue our own general obligation bonds."

Commissioner Mike Bridinger noted that he supports renovating the old court building, and is inclined to take Mr. Arkebauer's advice.

"I think there's a lot of value there, if we decide to renovate the 1884 courthouse, which is at no cost to the county, except for the lease payment. After whatever length this lease would be, then it's a nomimal fee and we'd purchase it back," Mr. Bridinger said.

Contact Tom Troy at:

tomtroy@theblade.com

or 419-724-6058.