The Mobile County Commission voted 2-1 June 24 to approve a $31.5 million loan for several capital improvement projects including funding for jail upgrades, road projects and additional funds for an Emergency Operations Center.
Despite being in the works for some time, the bond issue wasn’t mentioned during the commission’s conference meeting the week before. Nancy Johnson, Mobile County’s public affairs and community services director, said at the time the county was still waiting on confirmation before placing the warrants on the agenda.
“The bond counsel had asked us to get this proposal validated, which is a court process that also takes place before we can actually issue the bonds,” Johnson explained via email. “Meanwhile payments come due — such as the incentives ($4 million) already approved for Airbus — so there was motivation for us to move expeditiously.”
Altogether the county issued $31.5 million in general obligation warrants, which are secured by the credit and taxing power of the county as opposed to revenue from a specific project. That process is part of the county’s “dynamic structured debt service,” which is designed to keep the county’s level of debt payments the same from year to year.
During last year’s budget hearings, Mobile County Finance Director Michelle Herman said the county has maintained around $10 million in annual debt service in recent years, but that number did see a slight decrease in 2015. According to the agreement between Regions Bank and Mobile County, the bonds the county agreed to last week should be repaid by 2026.
“The process is that every two years bonds roll off and comparable borrowing is made to continue funding the capital budget, all the time with a level debt service,” Johnson said, adding that Standard & Poor’s has previously quantified that level as a “low overall debt burden.”
Upgrades at EMA facility
The projects covered in the recent warrants were approved in 2012 as part of 10-year Capital Improvements Plan. The largest portion of the $30 million available will be designated for upgrades to several public facilities.
Around $4 million of compliance upgrades at the Strickland Youth Center were included in addition to renovations to the vacant seventh floor in Government Plaza, which will be used by the county’s Public Works Department.
The largest portion of the $14 million in facility upgrades is $5.5 million set aside for the construction of a new Emergency Operations Center (EOC). An EOC is a centralized location used for the coordination of response and recovery processes during an emergency, and county commissioners have been working out how to fund the construction of a new facility for years.
Last December, Mobile County Emergency Management Agency Director Ronnie Adair said parts of the existing facility on Zeigler Boulevard were more than 60 years old.
“The size and operational capabilities of the current [Emergency Management Agency or EMA] facility fall far short of our needs for disaster response,” Mobile County Commission President Connie Hudson said in a statement to Lagniappe. “This is unacceptable in a hurricane-prone coastal area like Mobile County, where a fully functioning facility is critical for the safety and welfare of our residents.”
So far, the EMA has received about $2 million in federal grants for a new EOC, and spent nearly $800,000 of that on a structural plan. The Mobile County Communications District has indirectly pledged around $1.3 million to the facility as well.
Previously, the city of Mobile had offered to contribute $7 million to the facility, but eventually pulled out of that agreement. Back in December, County Engineer and former EMA Board member Joe Ruffer told commissioners a new EOC would only require $7 million from the county’s capital improvement fund.
Adair has previously suggested the new facility would cost somewhere in the neighborhood of $14 million. However, Commissioner Jerry Carl said there had been some discussions of scaling back the project, but a fixed price remains to be determined.
Carl also cast the only vote opposing the recent capital improvements loan.
“I’m against the size and cost of it. Why do you want to spend that much money, when you can spend half of that?” Carl said discussing the EMA facility. “I don’t think we have vetted the EOC well enough. The last meeting I was in they were talking about downsizing. Why borrow the money if we don’t know what we’re going to do with it? If we’re going to downsize it, we’ll borrow that amount of money when the time comes.”
Other capital projects
The county funds the lion’s share of road improvement projects through its Pay As You Go program, but some projects are tackled using capital funds. The recent CIP bond includes $2.4 million for an extensive widening and resurfacing project on Gulf Crest Road and includes matching funds for improvements on Zeigler Boulevard from Tanner Williams Road to Schillinger Road North.
About half a million dollars will also offset the costs of recent renovations at the Mobile Metro Jail including cell-door and lock upgrades. The first phase of the project was initially covered by a 2012 debt issue, according to the county.
Each of the three commission districts will also receive $2 million for parks and recreation expansions — projects that weren’t specified in any of the pricing details obtained by Lagniappe. Typically, each commissioner determines where and how their respective district funds are allocated.
There is also around $2.6 million in funds that aren’t earmarked for a specific project. According to a draft of the CIP allocations, the “projects to be funded from the unassigned balance will be determined by action of the county commission.”
Neither Carl nor Hudson gave any indication of how those unassigned funds would be utilized going forward.