County considers funding options for sports complexes | Local News
The Hopkins County Tax Court Economic Development and Workforce Committee discussed financial options and next steps for financing the construction of the joint sports complex project with the City of Madisonville.
At Tuesday’s meeting, committee members weighed the pros and cons of a local loan versus a government bond. Hopkins County Executive Judge Jack Whitfield Jr. has called for a vote to allow him to have a hearing with the Department of Local Government over the county’s debt at the next court meeting.
The committee has three funding options to consider – two local loans and a bond option that is managed out of Frankfurt from an office that works through the Kentucky Association of Counties.
“We’re going to have to go through a public hearing here and then have a local debt hearing with DLG,” Whitfield said at Tuesday’s meeting. “At the next meeting, I will ask you to approve that I have the hearing with DLG either in Frankfurt or through Zoom. “
Whitfield said the DLG must approve the county to go into debt for the project.
“We’re still hoping to stay at $ 5 million or less,” Whitfield said.
Comparing the loan to the bond, Whitfield said the loan option provides more flexibility in payments, allowing the court to pay off the debt more quickly if funds are available.
The bond option, although the interest rate is lower, requires a higher upfront payment and does not pay more each month, locking the county into a payment plan.
“With the local rental option, we would have the ability to pay more than the regular payment, which would be around $ 33,000 per month,” he said. “Everything will depend on the exact final price. “
Other magistrates have also seen the benefit of using a local loan instead of a surety.
“My recommendation is to go for the cheapest rates, and I hope we can pay this thing off in no time,” District 2 Magistrate Bill Rudd said, adding that with the loans it would be. more flexible payment depending on the county’s financial situation. situation.
“The payment is just over $ 33,000 per month,” Rudd said at the committee meeting. “If we were able to increase that and pay just $ 50,000, it would have paid off in less than 10 years. If it gets a little tight, we can go out there and pay $ 33,000. “
District 6 Magistrate Charlie Beshears said he was more concerned with the availability of funds for other projects as the loan payment continued, recommending that the payment plan be something that allows the county to pursue other projects if he wishes.
“I’m not concerned with the payback in seven or 10 years,” he said. “Paying it off early means there are a lot of projects we can’t do because all the funding for the county will be tied up. “
District 7 Magistrate Hannah Myers said she was not for the bond option.
“I’m not a bond person,” she said. “I don’t like the way it works.”
Whitfield also shared plans to use the funding that has been set aside through the coal severance package.
“This is a local government economic development fund, also known as a single county coal separation fund,” he said. “It’s funded by the state coal mines and the severance pay tax they pay to the state, and that pay is used for several different purposes. It is a very complicated formula that the state uses; some of it goes into a single county count and how much a county gets depends on how much coal is mined in that county, how many hours worked in the coal mine and several other factors. Once that is all figured out, that money is set aside for each county.
Whitfield said this funding was not in the county’s back account.
“It’s in Frankfurt, and we have to get approval to spend this money, and I have to sign it and all of our state officials and senators have to sign it, and it has to be for a use that is approved by the department. local governments, ”he said.
Whitfield added that there was approximately $ 3 million available for Hopkins County through this account.
“Over the past couple of years we’ve tried not to spend a lot of this one county coal separation money because we knew we had this project that we wanted to do,” he said. declared. “I like to save money to prepay as much as possible. The court will have to approve that as well as the severance pay for the coal that we are spending. It is a multi-step process. “