Commissioners Monday will discuss issuing $85M debt

The Ector County Commissioners Court is expected to consider Monday whether or not to publish a notice of intent to issue $85 million of public debt for a new courthouse.

The meeting is scheduled for 10 a.m. in the commissioners’ courtroom at the administration building annex, 1010 E. Eighth St. The item is one of the last items commissioners will consider on a lengthy agenda.

A new committee comprised of county and city officials recently formed to examine costs of building a new courthouse downtown, as the city works to revitalize the downtown area and county officials look to replace the blighted building. The committee, which was formed Tuesday, has only met once and all they’ve discussed is how the committee will operate, work together and the direction they’re headed with the project, Precinct 1 Commissioner and committee member Eddy Shelton said.

“The way I view this is, our $85 million, that’s good faith money that we’re serious about this collaboration with the city. That we’re putting our money where the mouth is and where our heart is and we’re gonna move forward on faith and I think the city has to make its own determination,” County Judge Ron Eckert said.

The county agenda item states the $85 million would go toward:

• Constructing and equipping a new county courthouse
• Parking for the new county courthouse
• Acquisition of land for the new county courthouse
• Demolition of the existing courthouse
• Professional services rendered in relation to such projects and financing thereof

Eckert has voiced support for issuing certificates of obligation several times, including during the primary election when another idea was put on the table by Eckert’s replacement. Voters elected businesswoman Debi Hays as the new county judge in March and she is expected to be sworn into the top county seat in January.

While campaigning, Hays proposed finding a private company to build a new courthouse and having the county enter into a lease-to-buy arrangement.

Shelton said that the county is seeking partnership from anyone they can.

“The city is definitely one of those entities that’s gonna partner with us, but we’re looking for partnership with whomever can, whether it be a taxing entity, a private entity . . . Our economy is driven by the oil and gas industry and there’s a lot of large oil and gas companies that are contributing to the burden of our growth. So we’re certainly looking for contributions in any manner that we can get it to partner up with resources,” he said.

Shelton said they need partnership with land acquisition, removal of existing facilities on acquired land and parking. In 2016, the city acquired the Odessa American building at 222 E. Fourth St., along with a nearby parking lot for about $1.6 million for the purpose of constructing a new courthouse there. Should the city share the financial burden of the project, the new facility would likely include space for city offices.

If the county doesn’t get the help with resources they are hoping for, the $85 million show of “good faith” would result in the county having to scale down the project, Eckert said.

“We also have other options that we could pursue that would be in different locations that might affect the price tag. Our first preference, like Eddy (Shelton) has said, is to be a part of the city’s vision of revitalization,” Eckert said.

As the Permian Basin gets ready to explode into another oil and gas boom cycle, Eckert said time is of the essence to issue the debt.

“We’re in a commodities community and pricing of various products and services runs pretty unpredictable pattern at times, but when you’re at the edge and heading into a boom cycle, that’s a scary time. You have pricing going up for services, for labor, for products and you have possible inflation tied to things like tariffs and other things that may be affecting prices of steel and other things,” he said.

The option of a bond election, he said, is out of the question. The county tried to pass a $95 million bond issue for a new courthouse about five years ago, which voters overwhelmingly rejected.

There is a law, Eckert said, that would prohibit the county from issuing debt for three years if a bond election were to fail. Tag on another two years for construction and the price tag for a new courthouse would likely be much higher in another five years, he said.

“So doing this right now, when we can try and have a good interest rate and where we have more predictable pricing makes fiscal sense. It’s the soundest time, fiscally, to do it and the soundest means of doing it,” he said.

The judge has called the need to construct a new courthouse an “emergency,” later calling it an urgent matter.

“Is it on fire down there, about to burn up? No. That would be an emergency. But we do have a sense of urgency that could very quickly become an emergency,” Eckert said.

Shelton said there’s a fine line between urgency and emergency, pointing out the courthouse’s recent phone system failure.

“We had an urgent need for a phone system. We knew that, we didn’t have funding for it. … It crashes. Now it’s inoperable. We’re without a phone system in the courthouse. What happens when this building becomes uninhabitable? We’re without a place for us to do what’s constitutionally required of us to do,” Shelton said.

If commissioners approve the notice of intent to issue the certificates of obligation on Monday, the county’s debt would total to about $108 million. Commissioners recently issued about $23 million in certificates of obligation to add on to the Ector County Law Enforcement Center.

“Right now the only source of revenue the county has to make those debt payments is ad valorem taxes so, depending on the assessed values that come out from the appraisal district, which will come out in July, it could be two-and-half, three, three-and-a-half cents on the tax roll,” County Auditor David Austin said.

A three-cent increase would translate into about $60 per year more on taxes on a $200,000 house, he said.

If the certificates of obligation are approved, Eckert said there will be two public notices issued, which will state the amount of public debt to be issued.

The public can petition the decision, which would require signatures from 5 percent of qualified voters in the county, and would force an election. If a petition is not turned into the county clerk within a certain period of time, Eckert said the final vote can take place June 11.