Beltrami County to pay off bonding
By Molly Miron, Special to the Pioneer
BEMIDJI – Over the years, Beltrami County has borrowed millions to build the downtown campus, but commissioners voted unanimously Tuesday to pay off the $960,000 remaining on the Beltrami County Administration Building mortgage.
“To have it paid off in eight years is wonderful for the taxpayer,” said Commissioner Jack Frost. “I will submit that this building was a good investment at a good time.”
Commissioner Joe Vene agreed, saying the Administration Building was “built adequately but not opulently for the 21st century.”
The county retired the final $335,000 on the 2003 jail remodeling bond in December 2011 in an accelerated payment. It was due in 2014. Also retired was a $7 million Law Enforcement Center bond in February 2012, due in 2023.
According to figures Administrator Kay Mack presented to the County Board, still owed are:
— $1,580,000 of the $5,025,000 taken out for the Community Service Center in 2003. The remainder should be retired in 2015.
— $4,735,000 on 2011 LEC refunding bonds due in 2023.
— $6 million on the 2005 Judicial Center bond due in 2025.
With the Administration Building bond cleared and the input of the Bemidji city share of $1,956,000 on the LEC bond, the 2012 year-end debt outstanding for Beltrami County totals $10,359,000.
Commissioner Jim Lucachick requested Mack to research which debts the county could retire before their due date without requiring the county to pay an early payment penalty.
“Beltrami County is in a great financial situation,” he said. “I think we need to balance our reserves with our debt.”
Lucachick said state statute requires counties to maintain a three-month reserve, but the auditor recommends a six-month reserve. Beltrami County has an eight-month reserve and no levy increase for 2013, he said. However, with investment interest rates running at less than 1 percent, he said the county is not profiting from the reserves.
Frost pointed out that when the county bonded for the current mortgages, the interest required was about 4 percent on the debts, a good rate at the time. Now mortgages rates are pegged at a little more than 2 percent.
“If we can retire those debts early, it would serve us well,” Frost said.
The commissioners by consensus agreed to look further into the possibilities of debt reduction at the next meeting Dec. 18.