Floyd County locks in bond prices for multi-million dollar emergency services communications system

By Bob Steenson, bsteenson@charlescitypress.com

The Floyd County Board of Supervisors approved a resolution to issue bonds to finance the cost of a new county emergency communications system at a meeting last Friday morning, July 28, held on a special day to meet a deadline to receive a reduced price on the equipment.

The interest rate on the bonds came in slightly below an initial estimate, fewer bonds will need to be sold because they are selling at a premium price, and the impact on county property taxes will be about 57 cents per $1,000 of taxable valuation per year for 10 years, according to information provided at the meeting.

Owners of a home assessed at a taxable value of $100,000 including credits and rollback would pay about $57 per year for 10 years toward paying the county debt for the new system.

The supervisors had earlier approved the project, which will include new mobile and portable radios and pagers for law enforcement and fire departments and some other emergency responders in the county, a new radio tower near Rudd, installation and training, all through Motorola Solutions.

The action Friday was to accept a contract on the bond sales that will lock in the interest rates, said Heidi Kuhl, vice president at Northland Public Finance, which handles bonding for the county.

“These general obligation bonds are to finance the emergency equipment, and it is structured over a level debt service for 10 years,” Kuhl said.

The supervisors had previously approved selling bonds to raise up to $5.1 million to finance the communications system. With legal costs and the costs of selling the bonds, they wanted the amount available to pay for the system to be $4.95 million.

Kuhl said the amount of bonds to be sold would be in the face amount, or par amount, of $4.83 million, because the bonds can be sold at a premium that will add an additional more than $301,000 to the total.

“You’ll see that you’re borrowing less than what you’re actually receiving into the funds,” she said. “That is because in today’s interest rate market for tax-exempt bonds, investors are paying what is called a premium in order to get these coupons, these 5% and then 4%. So the investors will be paying an additional $301,000 up front in order to get these interest rates.”

The actual interest rate cost to the county will be 3.47%, under the 3.65% she had estimated a couple of weeks ago when the bonding discussion began, Kuhl said.

The weekly Board of Supervisors meeting was held last Friday instead of it’s usual Monday morning time so that the legal documents can be ready to be signed at the next board meeting Monday, Aug. 7, and the bond proceeds can be deposited with the county by Aug. 22.

The sales representative for Motorola Solutions who had worked with county emergency responders to develop the communications system plan over several months had presented a proposal on May 26 for discounted prices on much of the hardware, and set a date of Aug. 24 that the proposal needed to be accepted by to lock in the prices.

Motorola had won the initial bid to develop ISICS (the Iowa State Interoperable Communications System) beginning in 2015 to be used for emergency responders statewide, and the company offers discounts for groups joining that system.

Related to the good interest rates the county will be getting on the bonds, Kuhl said, the county had retained its AA- (referred to as “double A minus”) financial rating by Standard & Poors, a credit rating company.

“We had a rating call last week and they noted very good information about the county’s financial practices,” Kuhl said. “Your debt ratios are low. You have good liquidity. You have that 25% expected carry-over that you try to meet each year, and you are exceeding that, which the S&P will find very very favorable.”

Kuhl said she is often asked how a county could increase its credit rating.

“To get a higher rating than what the county has at this point you’d have to have a significant valuation growth within your county to kind of broaden the total value,” she said. “That’s a little bit out of the county’s control. You received very high marks.”

The Board of Supervisors is able to approve issuing the bonds without receiving voter approval because expenditures for emergency communications equipment is considered an essential county service.

Also at the meeting, the supervisors:

• Tabled action accepting project specifications and setting a notice to bidders for a ditch repair project for county Drainage District No. 3 until a special meeting Tuesday, Aug. 8, so that postcards can be sent to all the property owners affected by the project letting them know that the specifications are available at the county Auditor’s Office.

Costs for the approximately $800,000 project will be assessed to the property owners in the district in a formula that includes number of acres and the comparative amount of benefit they get from the drainage district.

• Approved awarding a contract for $1,699,701.65 to Minnowa Construction Inc. of Harmony Minnesota for a Victory Avenue bridge replacement project. Duane Folz, assistant to the county engineer, said the bid was the lowest received at an Iowa Department of Transportation bid opening, and was $280,000 under the $1.98 million estimated cost of the project.

“We had actually the highest amount of bidders we’ve ever had on a bridge project. There were seven that bid on it, so we’re pretty comfortable knowing we got a really good bid on it,” Folz said.

• Assessed a cost of $8,500 to clean up property near Nora Springs to property owner Duane Tesch. Tesch had allegedly ignored an order to abate a nuisance that was issued by the county in November 2022, and after neighbors again complained to the Board of Supervisors in February, the county Attorney’s Office had file a notice of municipal infraction against Tesch in District Court.

At a non-jury trial on May 8, Magistrate Katherine Evans had ordered Tesch to either clean up the property by May 23 or else the county had authority to clean it up and assess the cost to Tesch. She also assessed a civil penalty of $315 plus court costs. When the property was not cleaned up by the deadline the county hired Zimmermans Digging and Demo of Ionia to remove abandoned vehicles, brush and weeds, appliances, tires, trash and other materials from the property.

• Received a letter from Drs. Paul Royer, David Schweizer, David Schrodt and Janet Tull that effective Nov. 1 they will no longer provide medical examiner services to Floyd County.

County Auditor Gloria Carr said they were asked to extend that deadline to the end of the year, Dec. 31, and they agreed to that, but didn’t want to go beyond that.

Chief Deputy Pat Shirley told the supervisors that having a medical examiner (ME) on the scene of a dead body is important, because one of the primary responsibilities is to determine if an autopsy should be performed to establish cause of death and gather other evidence.

The supervisors discussed a couple of options, including sharing an ME with another county or finding retired physicians to do the job, or having someone trained to perform the ME duties. The medical examiner does not have to be a licenced physician, but the Sheriff’s Office would prefer that the ME be a doctor.