By LeAnn R. Ralph
HUDSON — The St. Croix County Board has approved the sale of $80 million in general obligation bonds to J.P. Morgan Securities out of New York for the government center expansion and remodeling project.
The county has a bond rating of AA1, and the better the bond rating, the lower the cost of the debt, said Sean Lentz of Ehlers Inc., the county’s financial advisor, at a special meeting of the St. Croix County Board April 4.
St. Croix County has an extremely good bond rating in spite of Wisconsin’s levy limit, which is viewed as a negative in the bond market, he noted.
Since the St. Croix County Board first considered the issue of borrowing money for the government center in February, interest rates have increased, Lentz said.
When comparing what St. Croix County has paid for interest rates over the past 30 years, the interest rate is still historically low for the county, he said, adding that more interest rate increases are expected throughout the year.
The bids were due at 10 a.m. April 4, and St. Croix County received 10 bids on the $80 million in general obligation bonds, Lentz said.
Bids came in from Wisconsin and from around the country, with the best bid coming from J.P. Morgan Securities out of New York at 2.9 percent interest, he said.
The bid includes a $3.6 million premium, which can be deposited into the county’s debt service fund to pay the interest for 2023, Lentz said, adding that state law does not allow the premium to be used for construction but that the money can be put into a debt service fund.
$80,000 more
The interest rate is somewhat higher than the pre-sale report Ehlers provided to St. Croix County, so the debt service payments will be $80,000 per year more from 2024 to 2042, Lentz said.
In recent years, the county’s mill rate has been decreasing. In 2013, the mill rate was $4.09 per $1,000 of property value, and in 2021, the mill rate was $3.11 per $1,000 of property value, he said.
Based on the assumption that the equalized value of the county will not increase — which most certainly is not expected to be the case — borrowing the $80 million will add 43 cents to the property taxes per $1,000 in property value, Lentz said.
That would amount to $43 per year on a $100,000 property, or $86 per year on a $200,000, or $215 per year on a $500,000 property.
Paul Berning, county board supervisor from Hudson, questioned the closing date for the bond sale of April 18.
If the county board chair or some of the county board members change during the April 5 election, the closing on the bond sale would be affected, he said.
The chair of the St. Croix County Board, David Peterson, is officially in office until April 18, said Ken Witt, county administrator.
Reorganizational meetings for counties in Wisconsin will be held on April 19.
The St. Croix County Board approved the bond sale on a vote of 15 “yes” to two “no.”
County board supervisor Paulette Anderson, county board supervisor from Hammond, was absent from the meeting, and another supervisory position is vacant following a resignation.
County board supervisors Paul Berning and Rick Ottino voted “no” on the motion.
The St. Croix County Board approved moving forward with the $80 million government center project at the March 1 meeting on a vote of 15 “yes” to three “no.”
The original proposal included refinancing some debt along with $10 million for the Hudson Police Department, but several St. Croix County Board members expressed concern about the cost and allocating space for the Hudson Police Department with no guarantee that the police department would occupy the space or that the City of Hudson would cover the cost.
The St. Croix County Board rejected a resolution approving the sale of $90 million in general obligation bonds to fund an expansion and remodeling of the government center and to refinance debt on a vote of 13 “yes” to six “no” at the county board’s February 1 meeting.
The St. Croix County Board approved moving forward with the project after refinancing the debt and the Hudson Police Department were removed from the proposal.
More space
According to information posted on St. Croix County’s website, for the sheriff’s department, the project will include a public lobby, training rooms, evidence labs, interview rooms, increased storage space and secure parking.
For judicial services, the project will include additional courtrooms, a children’s waiting area for Family Court, dedicated jury deliberation rooms and more space for the district attorney and victim witness offices.
For other government services, departments will have larger areas to accommodate more employees and will have more meeting and collaboration space, including “flex space” to provide health and human services at the government center.
