November 1, 2007
Lincoln County May Sell Bonds

Photo by Dave Maxwell Scott Shaver (left), of Swensdseid and Stern, and Scott Nash (right), Managing Director of JNA Consulting, talking to Lincoln County Water Board about bond sales

By Dave Maxwell

Lincoln County needs to establish both a Special Improvement District and a General Improvement District for the Lincoln County Land Act near Mesquite; the Special Improvement District (SID) is the most important. However, the County does not have the wherewithal to develop an SID by themselves and are considering selling bonds to finance the project.

Scott Nash, financial advisor with JNA Consulting Group, LLC, along with attorney Scott Shaver of the firm Swenseid and Stern, both attended the last County Commission meeting to present their proposal to assist the County in developing a bond sale to support the formation of an SID at Toquop.

An SID is a public/private partnership in which property and business owners elect to make a collective contribution to the maintenance, development and promotion of their commercial district. In the case of the Toquop development area in the Land Act, it would provide a steady and reliable source of funding and all property owners and developers at Toquop would have to pay assessment fees. Other advantages include a cleaner, safer, and more attractive business district, the ability to respond quickly to the changing needs of the developers in the district and to allow the district to be more competitive with nearby retail and business centers. The City of Mesquite and all it offers is only a few minutes away from Toquop.

Nash and Shaver appeared before the board on the recommendation of County Building Director Ken Dixon. Nash said his company, JNA Consulting, if selected, would act as the financial agent for the sale of the bonds. Swenseid and Stern would be the bond attorney on the transaction and offer legal advice. Shaver said as legal counsel, Swenseid and Stern would prepare a lot of the resolutions and ordinances that would come before the County and offer a legal point of view. They would also be able to give the County some guidelines to standardize the process of creating a Special Improvement District.

Nash said the bonds could be offered to investors at a slightly lower rate than from the bank; they are tax-exempt and give the investor a higher rate of return since there is a little more risk involved. The return rate would be driven by current market conditions. “The underwriter’s job is to sell the bonds at a low enough rate, but high enough to get returns for investors,” he said.

Dixon said it would also be the responsibility of JNA Consulting to act as the assessment engineer, appraiser and handle the payment of assessment fees.

He also stated he felt there is an urgent need to form a General Improvement District at Toquop. “Urgent,” he said, “so we don’t have a zero balance when we start having to provide services. It needs to come together as soon as we can put it together. In addition,” he added, “the County road department does not have the funding to do it.”

A General Improvement District is responsible for the maintenance of public facilities (roads, sewers, curb and gutter, sidewalks, storm drains, water system and street lighting, etc.) within private developments. The District is usually governed by a five-member board. However, no action was taken at the meeting in regards to a GID.

After hearing the presentation from both parties, the Commissioners said they would continue to discuss the matter at their November 19 meeting.