The county will issue the short-term debt and pay back the proceeds using ad valorem taxes. However, according to Dan Wegmiller, financial adviser with Specialized Public Finance, the sale is not anticipated to affect the county’s tax rate for debt services.
In addition, he said a competitive sale allowing investment firms to bid on the tax notes—combined with the county’s AAA bond rating—means the county might only have to pay back $130 million-$140 million of the money it receives.
“[Investors] need to stick their money into certain years where they are anticipating or planning for potential drawdowns or movements,” Wegmiller said. “So high quality investors who want to know those funds will be there when they need to see a turnover will seek out bonds like yours.”
The TANs funds would go not only to remaining projects from the 2019 road bond program but will also cover costs for the expansion of the Williamson County Juvenile Detention Center. Interest rates on the tax notes are expected to land somewhere between 2%-3%. Commissioners, though, expect the repayments to cost less to the county than it would be to delay projects and wait for other funding sources, due to increases in construction costs.
“That’s what is attractive to me ... getting the project done for less money today as opposed to being in a position to have to do it in the future for more money,” Precinct 4 County Commissioner Russ Boles said.
Meanwhile, the court is expected to vote on forming a citizens bond committee on March 28. The group would analyze the county’s infrastructure needs and propose projects for a potential bond package in November. Each commissioner will appoint two members to the committee, while County Judge Bill Gravell will appoint the chairperson.
