Garfield County to pay off jail, sheriff’s administration building
August 7, 2012
GLENWOOD SPRINGS, Colorado – Garfield County commissioners will exercise the county’s purchase option on the county jail and sheriff’s administration building in Glenwood Springs, saving more than $2 million in future interest payments and retiring the county’s long-term debt for the time being.
“It’s an anomaly in government to be out of debt,” Commission Chairman John Martin said during the regular Board of County Commissioners meeting on Monday.
“Getting this done has been one of my biggest goals,” Martin added in a prepared statement issued by the county following the decision.
“We will be free of this commitment and own the jail and sheriff’s office outright,” he said. “We also have addressed the concerns of any citizens who thought our fund balances were a little too high.”
The BOCC voted unanimously to exercise the purchase option under a lease-purchase agreement used to finance the facility in 1999. The certificates of participation, or COPs, used as a financing mechanism, were refinanced in 2006.
The county will pay off the remaining principal of approximately $8.8 million using a combination of general fund and oil and gas mitigation fund balances.
In turn, the county will save a little more than $2 million in future interest payments, including an estimated $81,263 in interest this year. The total payment will be slightly more than $8.9 million under the buyout option.
The amount owed on the jail is technically not considered debt, because the jail payments are actually a lease under the lease-purchase agreement, county manager Andrew Gorgey explained. But, the buyout does eliminate a long-term financial obligation for the county, he said.
Colorado Counties Inc. reports that more than 80 percent of Colorado counties have some form of capital lease or other long-term financial commitment.
Once Garfield County officially retires the jail certificates on Sept. 7, it will be one of the few counties free of such obligations, Gorgey said.
“This just makes financial sense,” said Commissioner Tom Jankovsky, who serves as the BOCC’s representative to the Garfield County Investment Advisory Board, a volunteer group that assists the Garfield County Treasurer in monitoring the county’s investments.
“When our rate of return is about 1 percent and we are paying around 4 percent in interest on certificates of participation, it is clear this decision is a sound one,” Jankovsky said.
Added Commissioner Mike Samson, “We are blessed to be in such a strong financial position. … This move saves us millions of dollars, and our fund balances will remain healthy.”
Even after paying off the jail facility, the county is still expected to have fund balances of about $100 million by the end of this year.
Earlier this year, the county also decided to pay off the certificates of participation issued in 2001 for construction of the county administration building in Glenwood Springs and the Hunter Mesa road and bridge facility near Rifle. That $6.8 million purchase option saved the county approximately $2.4 million in future interest payments.