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CCCOG gets project bids for tax

Council of governments tallies town projects for 6th penny tax at $76M, calls for Nov. 28 special meeting

 

November 21, 2018



The Carbon County Council of Governments (CCCOG) met at 6:30 p.m. on Nov. 14 at the Jeffery Center in Rawlins.

Steve Nicholson, the chairman, Kenda Colman, vice chairman and Morgan Irene, secretary/treasurer were all in attendance.

Financials, minutes from Sept. 19 and the agenda were approved in timely manner.

Jon Nelson, owner of North Fork Engineering, gave an update of fundraising efforts being made on educational material for the Specific Purpose tax, also known as the 6th penny tax. He said that he had collected $16,500 and expected to hit the goal of $18,000 from different stakeholders with business interest in Carbon County. Several audience members asked if certain businesses had been contacted when he read the list of contributors and they were not on it. Every business asked about from audience had been contacted and declined.

Nelson said a Political Action Committee had been formed to take in the funds.

Barbara Bonds, Freudenthal & Bonds, P.C., was brought into the meeting on speakerphone to go over what had been done in the past for bonding and to answer questions about the current Specific Purpose Tax projects.

Bonds has 37 years of experience in tax-exempt municipal finance. She has served as bond counsel, disclosure counsel, tax counsel, underwriter’s counsel, issuer’s counsel, trustee’s counsel, or a combination of those roles. Bonds has represented the State of Wyoming, the University of Wyoming, cities, towns, counties, school districts and joint powers boards.

CCCOG members have had Bonds come to several meetings in the past six months to get her advice on how to proceed with the Specific Purpose Tax projects.

Bonds reviewed what had happened in 2008 when the Specific Purpose Tax had last occurred. She said the tax had been paid off earlier by about two years.

Irene Archibald, 2009 Specific Purpose Tax Bonds chairman, said the county averaged $358, 257 over 114 months in collected funds from taxes. She said there was a rebate of 45 percent from the federal government that had made it possible to pay off the bonds early. She didn’t think this would likely happen again.

Paul Hanley, Senior Vice President at George K. Baum and Company, was also at the meeting to help CCCOG members get the Sixth Penny tax on the ballot.

There are several wind projects coming to Carbon County that would put substantial revenue into the coffers of the county if this special purpose tax was approved at the date CCCOG is targeting. The wind projects must be completed by 2020, so if the special purpose tax was not approved in May 2019, considerable funds could lost that would benefit all citizens of Carbon County. This is a concern for Carbon County commissioners and municipalities.

Gwynn Bartlett estimated $22 million could be collected from the wind farms, but the members of CCCOG were not comfortable depending these funds when considering how much money would be collected.

To get the Specific Purpose Tax on the ballot in the timeline needed, town projects must be figured out by Jan. 17.

The funds needed to meet the projects proposed when the town’s members came to the meeting totaled $76 million.

“We have to answer how long we want to take to pay this off,” Nicholson said. “That is a key right now.”

CCCOG members agreed 15 years was probably the best time frame to pay off the bonds.

Nicholson said using average numbers from the past bond collected would be $64 million. This made the $76 million current price tag for projects untenable.

John Johnson, Carbon County Commissioner chairman, believed the wind projects were going to be realized.

“I have a high level of confidence that Ekola and TB Flatts are going in as well as Gateway West given that they have spent $4 million dollars upgrading roads and putting a bridge in,” Johnson said.

Bonds said although they want to take that into account, she counseled that towns might want to pare down their lesser projects to make the total fit.

Irene said his town of Elk Mountain only had one project, so there was no leaning down.

“The real work starts now from all the communities making the determination as to what projects are necessary to you and putting together numbers and projections, so that we know we can legitimately put them on the ballot,” Bonds reiterated to her audience.

Bonds said she understood all projects were important to every town.

“I know all these projects are very important, but I am sure the town councils and commissioners don’t mind picking out priorities,” Bonds said. “Also, it depends on how long you want to see this one particular tax in place without having the opportunity to change up and use those dollars for something else and how long you would feel comfortable telling your voters this tax will be in place to finance your particular set of projects.”

Bonds said a reserve fund of 10 percent would be required.

She said the law requires the specific purpose tax to be used for determined projects in a timely manner.

“I have to say we have to be more cognizant of having projects ready than the last time, although delays were all legitimate, but the IRS wants to see you extend 85 percent of the proceeds of the bonds reinvested income within three years of the date of closing,” Bonds said.

After listening to Bonds and discussing amongst themselves, CCCOG members decided there was a need to go to their towns and see what projects could leaned down and come back to work with a number that would hit the bonds without including the taxes hoping to be paid by the wind projects.

CCCOG decided to come back for a special meeting at 6 p.m. on Nov. 28 in Rawlins.

 

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