I attended the May 24, 2022 Camden County Commission meeting at 10:00 a.m.
All commissioners were present.
There were about fifteen people in the audience besides the Camden County employees who normally attend the meetings.
A female computer voice quietly announced from the heavens that the recording had started. I assumed this was a notification that Camden County’s new meeting recording system had just kicked in. Nobody else seemed to notice it so I sure hope I’m just not hearing things.
Commissioner Hasty started the meeting by opening it up for Public Comment about items on the agenda. I’ve included the posted agenda so you can see how difficult it is to tell what items are going to be discussed on the agenda and decide what you would want to say about them.
One person went forward and asked to see a copy of the resolution that was listed as one of the agenda items. The commissioners provided her with a copy and she read it aloud for the benefit of the audience. The resolution was to authorize the delivery of certificates of participation……blah…blah..etc. It basically would allow Camden County’s underwriter to seek out a municipal bond for $4 million which was strange since the courthouse project bid was for $4.7 million.
The Commission was asked about the courthouse building(s) remodel bid . (This bid was a single bid for $4.7 million from Veregy that was accepted by the Commission at last Tuesday’s Commission meeting.) Commissioner Hasty stated it would include part of the Justice Center and the Hugh Phillips Annex building. The commissioners said they do not have a breakdown of the bid regarding what money will be spent on which building. Commissioner Hasty stated he does not know how much of the money is going to be spent on the Annex building.
Commissioner Gohagan said that he had talked to the project manager at Veregy and she told him that over half of the money will be used to repair and remodel the Hugh Phillips Annex building. This building was purchased by the Commission several years ago for around $600,000 from Charles McElyea (the Commission’s Legal Advisor). No pre-purchase inspections were conducted on the building and it was later discovered that the building will require significant repairs to remodel it and perform asbestos removal/abatement.
Neither the County Auditor nor the commissioners had any idea what the cost breakdown on the bid might be. At last week’s meeting, the representative from Veregy was asked this same question, but he said he didn’t have those numbers with him. It was almost as if nobody wanted to say how much of the money is going to be spent on the Annex building, but eventually that information is going to come out on a major public project like this one.
Former Presiding Commissioner (and current candidate for Presiding Commissioner) Kris Franken asked if there would be opportunities to ask questions about this project in the future. He was told there would not be. He asked the commissioners if there was a dollar amount for how much it would cost to repair the Annex building because he didn’t think that building was worth $2.5 million. He wondered what dollar amount for repairs would make it smarter to just demolish the building.
Franken said he was disappointed with the Commission’s handling of the county’s finances. Commissioner Hasty told Franken that they (the Commission) did better than Camden County ever did while Franken was a commissioner. There was some back and forth and then Hasty told Franken to take a seat. Franken told Hasty he would happy to debate Hasty on the topic of finances.
A Camden County employee got up and asked the commissioners what they would do if the project goes over the bid amount or if the closure period (eight weeks) exceeds the contractor’s estimate?
Commissioner Hasty explained that the courthouse was built in 1931 and it needs repair. Commissioner Williams mentioned that they will need to have a lot of meetings with Camden County’s elected officials to come up with the plan for relocating the county’s employees during the closure.
She then mentioned that she and her fellow employees have to work in the building while the commissioners don’t have to come to work. She also pointed out that the elected officials had all remodeled their offices just last year.
Commissioners Hasty and Williams defended their work ethic as commissioners and said they put in plenty of time over at the Commission offices.
Phew. That was some hot stuff.
The first agenda item was for Camdenton Radios. The Camdenton mayor, city manager, and police chief were present for this item. They were asking for $239,000 for 18 portable digital radios and 12 digital vehicle radios. In the last few meetings, we’ve had Sunrise Beach PD ($38,000) and Linn Creek PD ($55,000) ask for digital radios. All three departments asked for ARPA (America Rescue Plan Act) money from Camden County’s pool of $8.9 million to pay for the radios.
Sometime this fall, Camden County dispatch will switch over to their new digital radio system and these police departments are concerned that they need new radios so they can communicate with Camden County Dispatch and the Sheriff’s Office.
Camdenton was allocated $800,000 in ARPA funds. They received the first $400,000 last August and they used $200,000 for sewer and water upgrades, The remaining $200,000 was used to provide premium pay (Remember, it’s not a bonus) to the city employees. They expect to receive the remaining $400,000 later this year and that money has been earmarked for water repairs and upgrades.
The Commission voted unanimously to earmark $239,000 in ARPA funds to buy new radios for the Camdenton Police Department. At this point, this means that the Camden County Dispatch upgrade has cost:
$906,000 for the upgrade
$239,000 for Camdenton PD radios
$38,000 for Sunrise Beach PD radios
$27,000 for Linn Creek PD radios (The Commission only gave them half of the $55,000 they asked for.)
The next agenda item was the Building Remodel.
Charlie Zitnick, a Public Finance Banker, then came up to the speaker’s table along with a young hipster banking guy to talk to the Commission about their options for securing a bond to fund the building repairs. He asked the commissioners if they wanted to talk to Veregy, the contractor, first, but Commissioner Hasty said he wanted to talk about the bond.
Zitnick and his partner praised the Commission for the excellent financial health of Camden County. I heard this same presentation when he appeared before the Commission about refinancing their sewer bonds, but I’ll summarize it again in case you missed that post.
According to Zitnick and his partner, Camden County is very favorably regarded in the Missouri debt market. It is rated as one of the top 10 counties in Missouri. The county’s credit rating is currently AA and Zitnick is trying to push for an upgrade to AA+ for Camden County. In 2020, approximately 50 Missouri counties were placed on a blanket credit watch list. Since Camden County stayed open for business during COVID, its reputation in the debt market improved and in September of 2020, Camden County was taken off of the credit watch list.
Commissioner Williams said he felt another contributing factor were the lessons learned from the Missouri State audit that Camden County has a few years back. Zitnick agreed that may have helped also. Zitnick stressed that one of the strongest indicators for Camden County’s financial health was an increase in the county’s cash reserves over the past years.
Commissioner Williams said that when he first took office, Camden County only had enough reserves to keep the county running for about 2.5 weeks. Zitnick said the county currently has between three and six months worth of cash reserves.
Commissioner Hasty asked Zitnick if Camden County is currently in the best financial position they’ve ever been in? He really leaned in on this one and I’m sure he was fishing for a good quote that could fit on a billboard.
Zitnick obliged and said that Camden County’s financial position is currently the strongest it’s ever been to the best of his recollection. Mr. Zitnick was very obliging.
Commissioner Williams asked Zitnick about projects where developers want the county to get bonds to help pay for their project. He expressed concern that these projects are a bad idea because if the development falls through, it would negatively impact the county’s credit rating. Williams was happy that the Commission had avoided financing these types of projects. He has mentioned this at several past meetings and Commissioner Williams definitely seems to be opposed to any County-financed private development plans. So that seems encouraging.
Zitnick told a cautionary tale about Platte County. Their commission financed construction of a parking garage for a mall and the development never worked out as planned. Platte County eventually pulled out of the arrangement in accordance with its legal right to do so, but their credit rating was immediately reduced to junk bond status.
Commissioner Gohagan asked his fellow commissioners how much of the building project was going to be paid by the bond? Zitnick said Camden County could finance the entire amount if they wanted to. He opined that the project could not be paid for with ARPA money.
(As a side note, Zitnick is incorrect. Regular readers will remember that BKD explained this in excruciating detail at a previous Commission meeting. The Department of the Treasury’s Final Rule states that if Camden County received less than $10 million in ARPA funds, they can select the short form box and it is presumed that the county lost revenue during the year. This frees up the ARPA funds to be used on anything that would qualify as government services: roads, public safety, capital improvements. It cannot be spent on debt service, stockpiling of reserves or legal settlements. I explained this to Zitnick after the meeting because I am a pain in the ass and it’s just my nature. ABG. Always Be Gadflying.)
There was a discussion about how much ARPA money was currently available and how much money Camden County currently has in reserve.
At this point, it almost sounded like the commissioners were trying to ask Zitnick how much they should finance.
Zitnick talked about the value of having cash available. I’m pretty sure he thought it would be a great idea for Camden County to finance the whole project with a municipal bond. We had all heard at the beginning of Public Comment that the bond resolution listed an amount of $4 million for the bond so you didn’t need to be Sherlock Holmes to figure out where this agenda item was heading.
Yet we still went through the “Commission two-step” to get there.
Commissioner Williams suggested they could get the bond and pay the principal down ahead of time. He was also concerned about the flooding damage in the county. FEMA money is currently not available because even though Camden County is over its qualifying amount for FEMA aid, Missouri hasn’t reached its FEMA trigger amount.
Commissioner Hasty said that the representative from Veregy told them the courthouse project expense could be more once they started getting into the project. (At that meeting, the Veregy rep actually said that the $4.7 million was a max bid and there would be no change orders.)
Commissioner Hasty was in favor a $5 million bond to cover any cost overruns on the $4.7 million quote. Commissioner Williams was concerned about the projected repair costs for water damage throughout the county so he was inclined to vote for the bond also.
The Commission voted 2-1 to seek letters of certification in the bond market. Commissioner Gohagan voted against it. He preferred to use $2 million in ARPA money and finance the rest of the project with a bond.
The resolution was then signed.
Zitnick explained that this resolution was not binding. It only gives them the go-ahead to start seeking a municipal bond for Camden County for this project.
The final agenda item was a Road and Bridge Budget Amendment.
$160,000 was moved from Equipment and into Materials.
This was approved unanimously.
And that was that.
A few quick points.
You probably shouldn’t ask your public finance banker for advice regarding how large a bond you should get to finance a municipal project. It’s like asking your mortgage broker whether you should pay cash for your house or pay for it with a mortgage.
I can only assume that we will eventually see a cost breakdown on the “courthouse” project and learn how much of the money is being spent to repair and remove asbestos from the Annex building. Kris Franken is correct when he says that there needs to be some repair cost maximum for that building where it makes more sense to just cut bait and demolish it.
Unfortunately, sometimes people are just too proud to admit they made a mistake and would probably prefer to just throw good money after bad. Especially when it’s not their good or bad money.