The Mobile County Commission borrowed $20 million by issuing general obligation warrants last week, which will provide funding for a number of big-ticket projects in 2019 and beyond.
As part of its routine approach to capital projects, the county went to the market on March 20 and came back with favorable interest rates, funding for 11 identified capital improvement projects (CIP) and additional money to be allocated in each commission district.
“The county timed the market quite well,” Josh McCoy of PFM Financial Advisors said. “With there being a [Federal Reserve] meeting, there wasn’t a lot of municipal supply coming to market, and certainly not anything of the quality of Mobile County’s [warrants].”
Issuing warrants essentially gives private investors an option to purchase the county’s debt, which the county then pays back over an extended period of time, 20 years in this case.
McCoy said the county’s debt is more attractive to investors than some other municipalities’ because it maintains high credit ratings with both Moody’s Investors Service and Standard & Poor’s.
The county’s last warrant series was issued in 2017, when it borrowed $37 million. According to munios.com, a website that tracks municipal investment opportunities, Mobile County has borrowed more than $200 million through the market since 2010.
As of late 2017, the county was carrying about $141 million of outstanding debt, but it has also routinely dedicated around $16 million (over 8 percent of its total budget) to paying down debt service annually. Lagniappe requested updated debt figures but has yet to receive them.
Other than roads and bridges, those borrowed dollars have gone into capital projects, which are generally some of the county’s most costly. A portion of each warrant series is also typically divided among each of the three commissioners for specific projects in their districts.
One of the most expensive projects included in the latest round of borrowing is likely to please anyone who has ever needed to be in a Mobile County courtroom at 8 a.m. The county plans to spend roughly $2.4 million on elevator renovations in Government Plaza.
A list of recommended projects released by the county notes that the improvements will focus primarily on “the four public elevators in the North Tower,” which service the courtrooms of Alabama’s 13th Judicial Circuit, Mobile’s Municipal Court and the District Attorney’s office.
“[These] are most heavily used and are loaded to maximum capacity throughout the morning hours each day. Each elevator has the equivalent of over one million miles of travel,” the document reads. “The elevators are beginning to show their age and repeatedly fall out of service due to problems associated with worn-out parts.”
The funding acquired last week would replace almost “every wearable part” on all four elevators.
Commission President Connie Hudson said another capital priority has been continued improvements at Mobile County Metro Jail. In 2017, the county spent $15 million to expand the medical wing, create a segregated area for mentally ill inmates and add a new sally port.
Its 2019 warrant issue includes another $1.5 million for additional lock and door upgrades, new “vandal proof” sinks and toilets and large-scale painting and refinishing throughout the jail.
Those and other efforts at metro have been conducted, in part, to address “deficiencies” outlined in a National Institute for Jail Operations audit conducted in 2015. That audit was a product of a 14-year Department of Justice investigation into the facility launched after an inmate’s death in the early 2000s. Sheriff Sam Cochran has previously said most, if not all, of the DOJ’s concerns have been addressed with the county’s help over the years.
“We’ve always utilized our CIP program money to try to address these issues where they exist in the jail,” Hudson said. “This is a public safety issue, and we’re going to continue the process until we can complete all that needs to be done to upgrade and secure that facility.”
The most expensive project in the recent suite of borrowing is a $2.7 million effort to replace a vehicle maintenance facility on Virginia Street the county says it has “outgrown.” According to the project list, the money would be used to purchase land and start construction on a new building.
Similar to previous CIP borrowing plans, all three commissioners will also receive around $3.8 million for capital projects in their respective commission districts.
Commissioner Jerry Carl has indicated some of District 3’s money will pay for renovations at the Grand Bay Library. Commissioner Merceria Ludgood, who represents District 2, lists upgrades and improvements to Clayton Park in Citronelle as one of her identified projects.
In addition to renovations at senior citizen centers in District 1, Hudson said she plans to continue using at least some of her allocated CIP funds on the Mobile County Soccer Complex — a project she championed, and at times solely advanced, since 2012.
Earlier this month, commissioners agreed to move forward on a $4 million plan to construct the first phase of the complex, which will be located on roughly 60 acres of land near interstates 65 and 10. Most of that money came from Hudson’s CIP funding from previous rounds of borrowing.
Commissioners agreed to spend $1.3 million purchasing the property in 2018, but have maintained an option to buy an additional 30 acres adjacent to it since then. Last week, Hudson said she plans to spend about $800,000 of her CIP funds to purchase those additional acres.
There’s no firm timeline yet, but the county’s option to purchase the additional 30 acres is set to expire in September. Hudson said she wants to continue designing Phase II of the soccer complex, but said construction is still a ways off because of how much it would cost.
“This will give us access to the other parcel of property, but as far as the construction of Phase II is concerned, that’s going to cost about $8 million,” Hudson said. “We’re not going to accomplish that anytime soon. It’ll have to be done in little bites.”
A full list of recommended projects that will be funded by Mobile County’s most recent batch of obligation warrants can be viewed below or at mobilecountyal.gov.
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