BROOKVILLE ‚ÄĒ The Jefferson County Commission recently received word that it will likely not be responsible for debt in excess of $1.5 million.
Elk County has agreed to purchase a Ridgway building that Jefferson County was partly responsible for. Elk County plans to use the facility as its 911 headquarters, and the purchase will eliminate Jefferson County‚Äôs liability for a bond issued to purchase that building.
‚ÄúIt‚Äôs not finalized yet,‚ÄĚ Jefferson County Commission Chairman Paul Corbin said. ‚ÄúThey have the basic agreement, but are working out details. A sewage line runs along property, and they‚Äôre working out who is responsible for that line and things like that. Just small things.‚ÄĚ
Corbin said he was ‚Äú95 percent‚ÄĚ sure that the sale would be finalized.
The debt resulted from a joint effort among Jefferson, Elk and Cameron counties to bring a technical trade school into the area.
A building to house that school was purchased in Ridgway in 1998.
The commission ‚ÄĒ then under the direction of commissioners Ira Sunderland, David Black and Donna Hoffman ‚ÄĒ agreed to, in essence, co-sign to the purchase of a building that would house ITEC, a technical training school.
The location did not do well, however, and ITEC chose to leave the Ridgway facility. That left Jefferson County responsible for 47 percent of the $3 million purchase price. Elk County was also responsible for 47 percent, and Cameron County was to pick up the other six percent.
At that time, in 2003, the county attempted to find another training school or other tenant which would assume that debt liability. The North Central Regional Planning and Development Commission has been making payments on the debt since then.
Corbin said North Central was making those payments from revenue generated from leasing space in the building.
Last year, Jefferson County paid $75,000 to North Central, which did not have the funds to pay that year‚Äôs debt service payment amount. That money was put into an escrow account, but was returned to the county this year.
Elk County‚Äôs reported purchase price for the building was $1.5 million. The purchase will pay the majority of the $1.8 million remaining on the loan. The remaining $300,000 will be paid by North Central, meaning that Jefferson County is now off the repayment hook.
It was anticipated that the county would have had to make payments around $90,000 per year for the next 10 years if the building was not purchased or leased. That would have been more than $2 per year for each county resident for a decade.
‚ÄúIt‚Äôs a good thing for the citizens of this county that they do not have to face the burden of funding this bond issue,‚ÄĚ Corbin said.
The news was certainly welcomed by Corbin, who said the debt has been ‚Äúhanging over the county‚Äôs head‚ÄĚ for more than a decade now.
‚ÄúThat‚Äôs going to give us that money that we had to account for each in the budget as a possible expenditure,‚ÄĚ Corbin said. ‚ÄúIt gives us the opportunity to use that money elsewhere.‚ÄĚ
Last year, it appeared that Precision Manufacturing Institute (PMI) would lease at least part of the building and establish a trade school. Anticipated state money did not arrive, however, and PMI withdrew its lease offer.
The commissioners said at that time that a technical training school would enhance the county‚Äôs ability to develop a skilled workforce and attract new businesses.
Now, Corbin said North Central is happy to be out of the schooling game.
‚ÄúNorth Central was never in position to run a school and didn‚Äôt have any experience in attracting students,‚ÄĚ he said. ‚ÄúI think it is better that we are out of the schooling business altogether and focusing on county development instead.‚ÄĚ
ITEC-related debt will no longer be a factor in the county‚Äôs financial standing.
That is good news for a county that already has seen its bond rating improve in the past year. An improved bond rating means the county can borrow at lower interest rates and in greater amounts.
The commissioners refinanced existing debt after the bond rating increased last year, which generated interest savings. Those savings were able to pay for nearly all costs associated with repairs to Jefferson County‚Äôs 911 center, which sustained significant water damage last year.
‚ÄúI assume that it will (improve again),‚ÄĚ Corbin said. ‚ÄúWhen we were last audited, the rating had gone up because of all of the things we had done here in the county. That audit would have included the bond liability.‚ÄĚ