Beltrami Co. Weighing Pros & Cons of Issuing Bonds to Help Fund New Jail

On Nov. 15 last year, the Beltrami County Board of Commissioners approved moving forward with the design and construction of a new jail facility. On Feb. 6 of this year, the board met with Ehlers, a public financing company, to identify the pros and cons of the county possibly issuing general obligation jail bonds this year to fund up to half of the estimated $80 million jail cost.

The county is estimated to pay approximately $2.4 million per year. The pros of the financing plan are that the county can quickly proceed with jail design and pre-ordering of materials without using county reserves.

But the cons are that there will be higher total issuance costs for two bond issues than for a single issuance, and if bond rates increase significantly, the county may regret not financing the jail cost in 2024.

“This is really just about, how is the county going to fund the expenses that it’s already taking on for the jail?” explained Bruce Kimmel, a senior municipal advisor with Ehlers. “The other option would be to use fund balances, cash reserves, and there’s a number of reasons why the county doesn’t want to draw those down too low. So really, this is kind of … [a] good middle ground solution to allow the county to keep going on the project without dipping too deep into county reserves, but also to finish up the financing once everything is better known next year.”

If the board approves the financing plan, a public bond sale would happen on March 19, with the settlement on Apr. 10.