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County Government

Supervisors proceed with downtown jail project

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The Carroll County Board of Supervisors agreed Tuesday to spend millions of dollars more than originally intended on a new downtown jail.

In a 4-1 vote, the board approved a $10.9 million bid from Badding Construction to build the jail, which is about $4 million more than what voters were told it would cost last year.

Supervisors hope to shave about $550,000 from that construction price by scaling back certain aspects of the project, which includes using less insulation, omitting a public elevator, moving an electricity generator outside and delaying the purchase of kitchen appliances.

“If we would put this off, we would have increased expenses,” Supervisor Neil Bock said before the vote. “We would just multiply our problems.”

The total cost of the project initially was estimated at $8.95 million, which was the amount voters in a bond referendum agreed to borrow to pay for it. Of that, the estimated construction cost represented about 75 percent, or $7 million.

Supervisor Dean Schettler, who was the lone vote against the project Tuesday, criticized the other board members for agreeing to spend millions more.

“We’re spending beyond our means,” Schettler said. “We’re spending money we don’t have.”

To get more money to pay for the project, the supervisors might sell about 114 acres of farmland the county owns just north of Carroll. They have estimated the land is worth at least $800,000.

The supervisors also are considering borrowing up to $1.9 million more than what voters approved.

By law, the county’s loan amount can’t exceed what voters approved last year, but investors who buy the county’s bonds are willing to pay the county money up-front for a higher interest rate. The supervisors have considered borrowing at a rate that is about three times the current market rate to get the up-front money.

Here’s the potential difference in what the county would actually spend on the loans:

If the county borrows $8.95 million at current market rates — as originally intended — it would pay about $1.5 million of interest on the loan, based on estimates obtained by the Carroll Times Herald.

If the county borrows at a higher interest rate of 5 percent and is not able to refinance to a lower rate — which it would have the option to do in seven years — it would pay about $5 million of interest. In the best-case scenario, if the county can refinance, the county still would pay about $3.5 million of interest.

A clear borrowing plan has yet to materialize. The supervisors did not discuss it Tuesday before the vote.

“It’s very legal. There’s nothing illegal about it,” said Robert Josten, the county’s bond attorney, who is based in Des Moines. “This is a market-driven thing. The people who are buying the bonds are driving this.”

The scramble to find enough money to pay for the project began weeks ago when construction bids exceeded cost projections by millions.

The supervisors hired Shive-Hattery, an architecture and engineering firm in West Des Moines, last year to guide them through the jail-building process.

Mike Lewis, a team leader for Shive-Hattery, has attributed the disparity between the construction estimates and bids to “market conditions.” The supervisors also have made changes to the jail plan that increased the cost, but it’s unclear how much it increased because of those changes.

“I’m more vehemently opposed to this than I ever was,” Schettler said Tuesday.

He again asked to restart the project and build the jail away from downtown Carroll.

Supervisor Gene Meiners said residents who have talked to him about the downtown project have almost universally said: “Get this done.”

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