County approves seeking financing for new courthouse

Douglas County’s effort to build a new courthouse began fresh on Thursday as county commissioners voted to seek approval once more from the Debt Management Commission to sell bonds to support the $50 million project.

Project Manager Scott McCollough said the cost of just getting the project started have ended up delaying the start of construction until spring of 2025.

“We are trying to find a project that fixes those costs and meets the program requirements,” he said.

County Financial Advisor Marty Johnson said that while the county borrows at tax exempt rates, they have been rising steadily over the past year, peaking in June 2023 before coming down slightly.

A combination of financing methods are being proposed, including seeking the maximum amount of general obligation and medium term bonds.

Having a mix of funding sources would offer the county more flexibility in financing the project.

Before bonds could be issued, commissioners would still have to approve a bond ordinance before they could be sold.

The largest source of income to finance the courthouse is the county’s consolidated tax rate, which includes sales tax.

That source is currently paying off the Carson Valley Community & Senior Center and is raising around $2.5 million every year.

That could raise $37 million with $5.4 million in interest and bring the county’s total debt to $79.44 million at 5.4 percent a year.

Consolidated tax collections have increased an average of 8 percent each year since 2017. The current debt service on the community center is $730,000 through 2033. Johnson said that at 2.1 percent interest on that loan, it would be better to leave that alone for now because the county is earning more than the $750,000 a year it costs to serve the debt.

Under the proposal approved last week, the county would issue $13.65 million in medium term bonds, which must be paid off within 10 years of approval. No additional tax rate would be levied to pay for the bonds, which could be paid off using the nickel capital projects tax rate.

State law allows court fees to back a general obligation bonds of up to $9.5 million based on an annual $650,000 collection rate.

Commissioners could also enact a quarter-cent sales tax that could generate up to $2.5 million annually providing a source for another $36 million. 

Because the county is at the $3.64 per $100 assessed valuation property tax cap, that is not a source of income available for the project.