Commissioners discuss funding for courthouse project

by Angie Asam-Staff Writer

The Presque Isle County Board of Commissioners met last Thursday and heard from Thomas Enright, senior vice president and public finance banker with Hilliard Lyons of Trenton. Enright met with board chairman Carl Altman and county treasurer Bridget LaLonde prior to the meeting as he was giving them advice on funding the proposed courthouse renovation project.

Enright gave the board advice on financing the project in the scenario of the county needing to borrow $3.5 million over a 20, 25 or 30-year period and what the payments would be. He went on to tell the board that if it hired his company as an underwriter for the bonds they would do whatever they could to get the bonds sold.

The board was informed that if it stretched the term to 30 years it could save $44,000 but it would cost $1 million more in interest. Hoping to put $500,000 on the $4 million project, Enright showed how an annual payment would amount to $248,617.00 over 20 years and $203,645.00 over 30 years, based on bonding $3.5 million.

“If you hire us as the underwriter, we would buy the bonds and sell them to our clients, we would do everything necessary to get the financing done. You would avoid the cost of paying a financial advisor ranging from $15,000 to $18,000. We would do all the necessary work and be paid out of the transaction; we would buy the bonds from you at a price and sell them at a different price and be paid the difference,” said Enright.

Enright also touched on the idea of having the financing done through local banks. He told the board that typically banks do not sell bonds for longer than 12 years but it was something it could continue to discuss as an option.

“What I can’t do is I can’t help you come up with the money. I can’t tell you whether you have the wherewithal to do this. I can’t substitute my judgment for you in terms of making the payment or determining how you are going to make the payment,” said Enright.

Commissioner Stephen Lang has had the same question all along. “No one yet has explained to me or presented me a financial plan out the next 15-20 years to see if we can pay for this for the next 15-20 years,” he said.

Enright told Lang and the rest of the board that wasn’t a question he or his firm could answer. “I can say to you of course you can make the payment because if you commit to this, if you borrow the money, if you sell the bonds, and go forward with the project you will make the payments, you won’t default. But what does it take to make that payment? I can sit here and tell you to cut here or there to make the payment but my opinion doesn’t count. I can’t tell you where you get the money to make the payment, no one can tell you that except you,” said Enright.

Altman then told the board that he believes the next step is for the county to look internally at finding more funding to put down on the project. “We are going to look at some more internal processes if you will or financials. I have directed Bridget, that the state has offered some counties a chance basically to draw all the money out of the tax reserve fund. There is about $900,000 in there. With other money we have, we could make a larger down payment,” said Altman.

In meeting with LaLonde and Enright, Altman also told the board that the county accumulates around $200,000 per year right now and if it could make a larger down payment and get the bond payments reduced to around that number it could feel more comfortable with the funding.

“The way I feel about it is if we don’t think we can do it over 20 years, in 20 years we have a building that is another 20 years older and we still haven’t made the problem go away. This is just a discussion, we aren’t going to move forward with this until we see the bids anyways,” said Altman.

ON MARCH 13 the board met with Jake Guter, project manager and architect with U.P. Engineers and Architects. Guter brought Todd Britton of Meridian Contracting Services with him. The two met with the board to go over a proposal to put together the project design so it can go to bid.

The project design will make up the bidding documents and more accurate cost estimates will be available once the project is bid out. The goal is to split the project into several smaller bid packages to allow local contractors to get involved in the renovation project.

The board unanimously approved doing the architectural design phase with U.P. Engineers and Architects pending a review of the contract by legal counsel. They also approved Meridian Contracting to do the estimating on the project pending receipt and legal review of their proposal.

In October of 2012 the board reviewed plans done by Trinity Architecture of Gaylord. Tad Latuszek, architect, presented plans for the construction of a second-floor addition over the current jail to house two courtrooms, court offices and several county offices. Once the addition would be completed the old wood-framed courthouse would be demolished and a new two-story main entrance addition constructed in its place.

The second-floor addition above the jail would be connected to the current annex and would contain a secure elevator going to the jail, to eliminate the security concerns that exist with taking inmates around outside and up to the courtrooms.

His proposed project came with an estimated cost of $3,039,063. A 2,000-square-foot addition to the current jail is also an option that could be added with an estimated price tag of $287,325 to bring the total cost to $3,326,388.

IN EARLY December of 2012 the board received a second opinion on that proposal from Guter who looked at Trinity’s plans to offer his cost estimate. Guter’s number came in higher with a proposed cost of $4 million. Guter told the board that he felt his was a more accurate estimate as it covered some things that Trinity didn’t include that would need to be done.  Guter’s cost of $4 million did not include the jail expansion which he felt had a price tag of $350,000 extra.

U.P ENGINNERS and Architects and Meridian Consulting completed the work at the Millersburg Trailhead Facility in the county. Trinity Architecture was involved with the renovations of the former Nowicki Sausage Shop into a county annex building. The county did incur some cost overruns with the work on the annex building while the Millersburg Trailhead project stayed under the project budget.

The courthouse and its renovation or reconstructuction has been a topic of discussion for county boards since 1959. The building was built in the 1880s and the annex was added in 1988 with a jail that was built in 1974.

In August 1959 the then board of supervisors passed a resolution to hold a special election to ask voters to decide what to do with the courthouse. The resolution stated, “The courthouse is approximately 70 years of age and no longer adequate for the needs of the county…” The jail, then located in the southwest corner of the first floor was threatened to be closed.