Mesa County to spend $17 million on capital projects
Mesa County commissioners Monday unanimously approved a financing agreement that will subsidize millions of dollars in capital projects this year, looking past some citizens’ criticism that the county shouldn’t take on debt in a recession and didn’t do enough to vet the proposal with the public.
The agreement will directly finance $17.5 million in new facilities and trails and building improvements, some of which originally weren’t scheduled for construction for a few more years. It also will free up roughly $12 million in the county’s capital fund for two road-widening projects that also weren’t slated to start until a couple of years later.
County officials called the agreement a sound business decision. They said it allows them to build at a time when interest rates are at an all-time low, and they can save 10 to 20 percent on projects due to less expensive construction costs.
“My interest in this proposal is that we can get these projects done now and enjoy the benefits from getting them done now but in the long run save dollars,” Commissioner Steve Acquafresca said.
County Administrator Jon Peacock estimated the funding mechanism, known as a lease-leaseback, will generate $18.5 to $19 million in up-front cash for the projects. He said the county will pay that money back through annual payments of between $1.5 and $1.8 million over a maximum of 21 years, although the payback time could be as few as 10 years should county sales-tax revenue rebound.
By comparison, Peacock noted the county is spending $3.2 million a year, with the last payment due next year, to pay off sales-tax bonds issued in 1983.
He also noted that as recently as 2000, 38 percent of the county’s sales-tax revenue was allocated to pay off both the 1983 sales-tax bonds and a financing agreement on the jail similar to the one the county will use now. The financing agreement approved Monday will consume just 8 percent of the county’s sales-tax revenue.
Several citizens, however, spoke in opposition to the county going into debt to pay for the projects, noting the county would have been just a year away from being debt-free for the first time in nearly 30 years.
Grand Junction resident Kent Baughman read a letter written by brother and former County Commissioner Jim Baughman in which he asserted that “trying to borrow your way out of a recession is right out of (President) Obama’s playbook.”
“We’re in the middle of a worldwide recession and it makes no sense to borrow $20 million now,” Jim Baughman wrote in the letter.
Both Kent Baughman and Dennis Simpson of Grand Junction said the county should have spent more time discussing the plan with the public. Simpson said commissioners should consider other options, such as reducing property taxes.
“I think we’re being steamrolled a bit now,” he said.
Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, said the agreement will lend a helpful hand to the local construction industry, which she said is suffering from a 25 percent unemployment rate.