ROCK SPRINGS — The Rock Springs City Council discussed the possibility of issuing bonds to fund projects proposed for a potential sixth penny tax measure that municipalities want to see on ballots next year.
The purpose of the discussion was to give general direction to councilors on the question of bonding in advance of meeting with the Board of County Commissioners on December 5. The council decided not to support full bonding, voting six to three against bonding the entire group of proposed projects. Mayor Timothy Kaumo and councilors Rob Zotti and Jeannie Demas voted in favor of full bonding.
Zotti said that full bonding would save the council deciding what order to complete projects in as they wait for tax money to be collected. “If we stretch this out and only do projects as funding comes available, we don’t have control over the costs of these projects,” Zotti said, noting that over time costs for projects will go up from current estimates. “It’s just a matter of how much and then will we be stuck five years down the road with not enough money to fund the projects with the money collected.”
Councilor Keaton West asked if there’s a point where interest rates for bonds would be too high to be acceptable. West suggested that the council could consider funding the highest priority projects through bonding and wait for funding to become available for others. That was the case with the most recent sixth penny tax in Sweetwater County. Over $81 million in projects were funded through the previous tax and of that $51 million in funding was bonded, costing just north of $5 million in fees and interest.
West said improvements to the wastewater treatment plant would be an example of a project the city would want to “hit the ground running with” and fund through bonding, while some others could potentially wait for actual tax revenue to be collected.
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Council members noted the difficulty of deciding whether bonding is prudent without knowing exactly how much it will cost. But that clarity won’t exist until cities, towns and ultimately the county decide what projects will get put on a ballot measure.
“One of the hard things about having this discussion now is we don’t really know what the list is or what the amount is. Until we can really nail that down, we won’t know the cost for bonding,” Zotti said.
Kaumo said that if the council decides not to offer bonds, they lose the advantage of investors marketing and campaigning for the new tax, which offsets some of the costs of bonding fees. Entities would then have to raise funds for marketing themselves. “We cannot utilize public funds for that, so it also includes fundraising,” Kaumo said. “You’re basically paying for the material, the canvassing, the marketing as part of that program.”
Councilor Glennise Wendorf asked if smaller entities would help with marketing in lieu of having it provided by bond investors. “You can rest assured the city of Rock Springs is gonna take the lion’s share of this one,” Kaumo replied.
“If we choose not to bond the full amount, they’re still going to market for us regardless,” West said. Pointing out that was the case with the last sixth penny tax levied in the county.