Routt County commissioners have figured out a way to build a new court facility without asking for a tax increase. But while the commissioners deserve credit for financial creativity, the new plan raises concerns about long-term costs and the impact those costs will have on county operations.
Last week, commissioners voted unanimously to pay for the new justice center by dipping into the county's reserve funds for some $7 million and using certificates of participation to fund the remainder, about $5 million.
The plan has a distinct advantage over previous ones -- it does not require voter approval. That's significant considering that in November 2002, voters rejected a tax increase for a new court facility. That plan called for a $17 million judicial center downtown with a parking garage. Besides the tax increase, voters opposed the cost of the project, the location and the garage.
Even by resolving those issues, the justice center is tough to sell to voters. Given the cramped and outdated conditions in the existing courthouse, there is no disputing the need for a new facility and meeting that need is a function of county government. But how do you get voters excited about paying for a facility most believe they will use rarely if at all? As Commissioner Nancy Stahoviak notes, the justice center "is a ballot with no constituency."
Still, with a new location and reduced cost, the county's chances of winning over voters would have been better. And it is not uncommon for voters to support revamped bond issues that failed on the first try.
But under the certificates of participation plan the county can meet Judge Richard Doucette's mandate to build a new facility by Sept. 30, 2006, without a tax increase, a costly election campaign or risk of voter rejection.
It's important to note that this plan will cost the county more in the long-run than it would to issue and repay bonds approved by taxpayers. Certificates of participation are guaranteed by existing tax revenues. Essentially, the county would be leasing the new court facility. So long as the county makes its payments, it can use the new facility. At the end of the lease, the county will pay a buyout to own the facility.
Because the certificates are not backed by a dedicated tax source, financing costs are higher than bonds. Commissioners estimate it will cost about $8,650 more each year for 20 years to finance the judicial facility this way.
Commissioner Doug Monger estimates it will cost the county more than $500,000 per year to repay the certificates of participation and pay for the additional costs of operating the new facility. Because there is no tax dedicated to paying that debt, that money must come from the county's general fund or reserve balance. While residents aren't being asked for a tax increase, the plan will have an impact on existing operations and services.
Routt County needs a new court facility and we applaud commissioners for exploring different options to make that happen. Perhaps this is the only way commissioners thought they could ensure the project will be done.
But this method is no victory for taxpayers. Ultimately, it will cost them more. The truth is the plan isn't designed to benefit taxpayers. Rather, it's simply a way to remove them from the decision.