Justice Center deal almost finalized

The former Pass It On building will soon become additional court space
Staff Writer

Clay County could have the money in the bank by the third week of April to start work on its new Justice Center.

And with some luck, the county can save more than $1 million in principal and interest payments and pay off the lease purchase agreement in as little as 10 years, according to documents reviewed Monday by the Board of Supervisors.

The resolution calls for the county to support $3,965,000 in bonds to renovate the 20,000-square-foot former Jitney Jungle/Pass It On building on Main Street in West Point into offices, courtrooms and related facilities for Circuit and Justice courts. Chancery Court and the Tax Assessor would remain in the current courthouse. The county has not decided what to do with the Justice Court building.

Of the $3.965 million, $2.871 million is for actual construction, $495,000 is for the purchase of the 2.23-acre site, $174,000 is for architect and related fees, $220,000 is to cover interest during the first two years and $198,000 is for bond costs.

Based on the $127,778 current value of a mill, the county can fund the project with a negligible tax increase. And with any luck, it might not need one at all.

The financial numbers on the 20-year lease-purchase call for the county to pay a minimum of $312,000 to $314,000 a year in lease payments with the full amounts starting in 2021.

However, the actual funding plan calls for the county to pay more than that with a target of paying the agreement off in 10 years and no more than 15 years.

"You will pay a good portion of it off in 10 years, if not all of it, and 15 years at the most. With a 12 to 13 year payoff, you save $600,000 to $900,000 in interest and a total of more than $1 million in interest and principal," financial consultant Lynn Norris, of Government Consultants Inc., told the board.

"If we have growth in the value of a mill, we could pay it off earlier or not need the little tax increase," Supervisor Shelton Deanes added.

Greg McMurray of Crews and Associates, the company underwriting the bond issue, said the bonds could got to market next week -- "probably Tuesday or Wednesday if the markets look in our favor " -- with a projected interest rate of 4.15 percent.

On that timetable, the deal would close about April 22 and the county would get its money.

The project is a lease-purchase agreement with the Golden Triangle Public Buildings Corp., the tax-exempt arm of the Golden Triangle Planning and Development District. Jackson-based Benchmark Construction is the construction manager and has hired a number of area firms to do subcontract work on the building, which will include offices, three courtrooms, meeting areas, jury and witness facilities, inmate holding areas and a number of other services.

The financing plan includes several elements but relies heavily on revenues and taxes already in place.

Starting in the current budget year, supervisors have put aside $260,000 in revenues that had been allocated to other purposes that have been paid off. Starting next year for the Justice Center project, supervisors also will have available .25 mill from a $230,000 2014 bond issue that is paying for the new voting precinct the county built on Brame Avenue.

If nothing changes, a .1 mill tax increase would be needed in 2020 and another .1 mill in 2021. Combined on a $100,000 home, that would amount to $2 a year in additional taxes.
"If the value of a mill goes up, we might not need that increase," Deanes reiterated.

By the time the full plan is in place, the county would have more than $381,000 available for payments, making it easier to pay the lease off earlier.

Construction is expected to take about a year. Work on the other county buildings may be done with inmate labor once the Justice Center is opened, probably sometime in the summer of 2019.

The county has been planning this process for well over a year, setting up potential financial scenarios to minimize the impact on taxpayers while maximizing potential benefits.

The county's first lease payment will be a partial one, $76,353 in April 2020, with the full payments starting the next year.

The $260,000 the county has been putting aside will continue for two more years, leaving enough money in a nest egg to furnish and equip the new building with some possibly left over for renovations at the existing buildings.

Supervisors are expected to vote on the contracts and resolutions at their meeting Thursday.