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Loading...If you’d asked that question six years ago, the number you would have gotten back would be almost 10 times less than it is today.
At the end of 2006, county government had $3.3 million in long-term debt, with $245,000 due in debt payments in the upcoming year. By the end of 2011, however, the county’s overall debt load had grown to $31.4 million, with $2.1 million in payments due.
Most of that debt wasn’t accumulated during the county’s prime capital projects period from 2005 to 2010, when it built or chipped in to build a new health department, emergency operations center and courthouse. Those projects were paid for with reserves or cash on hand. Rather the debt was taken on in 2010, when the county bonded for a new $25 million jail a year before making its last payment on a $2.5 million bond issued in 1989 to pay for renovations of the old jail.
Servicing the county debt in 2011 required 4.1 percent of the budget.
The county could legally borrow another $25.5 million before it reaches its statutory limit on debt, which is 2 percent of the fair market value of taxable property in the county. However, despite being at only 55 percent of its limit, the chances of the county borrowing more are slim, according to Tooele County Auditor Mike Jensen.
“Legally we haven’t reached the limit, but to borrow more money we would have to have a way to pay it back,” said Jensen.
With the county scrambling to make up for an unexpected $4 million drop in revenue for the current year, borrowing more isn’t something it is thinking about right now, Jensen said.
The $25.8 million for two bonds issued in 2010 and 2011 to build the new county jail makes up 81 percent of the county debt.
The balance of that debt originated in 1998 with a series of bonds issued to pay for improvements at the Wendover Airport totaling $2 million. The county also bonded in 2003 for $1.7 million to bring water from Grantsville City to the Deseret Peak Complex.
In 2005, however, county building picked up steam. That was the year the county bonded for $2.6 million to pay its portion of the $10.6 million Gordon Hall Courthouse. In 2008, it floated another $2.3 million bond to add a convention center on to the arena at Deseret Peak Complex.
The county also built or bought some facilities during that time period without bonding.
The $4.5 million Emergency Operations Center was completed in 2009 with $2 million from the Chemical Stockpile Emergency Preparedness Program and $2.5 million from the county’s fund balance (rainy day fund) using money accumulated from mitigation fees.
A $5.5 million expansion of the Tooele County Health Department Building was finished in 2008 with $1.8 million in CSEPP funds and $3.7 million paid through mitigation fees.
The county also paid $347,823 for the JCPenney building in 2007 — a price that was partially offset by a $100,000 Community Development Block Grant — in order to house its expanding relief services department and the food bank.
All of the county’s long-term debt is in the form of revenue bonds, which it can issue after a public hearing without the support of voters at an election. Revenue bonds are backed by either sales tax or lease payments using a mechanism authorized by the state where the county forms a municipal building authority, managed by the county commissioners. The MBA then bonds for and builds the facility and leases the building to the county, using the income from the lease to pay the bond.
Lease revenue bonds generally carry higher interest rates than general obligation bonds, which are only issued after being approved by voters.Tooele County commissioners could not be reached for comment on this story.
