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Yavapai County Mulls Bond Issue for Prescott Jail

Credit: Daily Courier

By Cindy Barks for Daily Courier

Yavapai County could be poised within the next four months or so to borrow upwards of $68M to pay for a new jail in Prescott.

And if that occurs, initial site work could be underway at the chosen jail location along Prescott Lakes Parkway by about July 2020.

During a study session in Prescott Wednesday, Nov. 6, the Yavapai County Board of Supervisors heard a report from Stifel Public Finance consultants about the process necessary for a bond issue to finance the estimated $68.5M cost of a new 144-bed jail.

While the supervisors took no vote this week, a decision on whether to bring Stifel on board to handle the bond-issue underwriting process is expected to be on the board’s agenda for its meeting on Nov. 20.

BORROWING PROCESS

Earlier this year, the county approved a property tax increase, with the intention of annually putting about $4M of the additional revenue toward the cost of a new jail in Prescott.

This week’s presentation was the kick-off of the discussion on how to finance the cost of the jail to allow construction to begin in 2020.

Stifel consultants Grant Hamill and Randie Stein told the supervisors that the steadily increasing revenue through the existing one-quarter-cent jail sales tax (Jail District Excise Tax), combined with the county’s lack of any other outstanding bond debt, should make for a relatively low interest rate for the bond issue.

FUTURE STEPS

After the supervisors decide whether to bring Stifel on board on Nov. 20, a decision is expected in December on the choice of an architect for the project. A construction manager at risk could also be chosen that month.

Although the exact amount of the bond issue is yet to be determined, Bourdon said the cost of the jail is projected at $68.5M.

Stifel’s presentation included numbers for a $70M bond issue, indicating that the estimated annual debt service (the amount the county would have to pay toward the bond each year) would be about $5.3M.

Bourdon said the county likely would pay back the bond issue through a combination of property-tax revenue, jail sales tax revenue and general fund revenue.

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