Carroll County leaders are set to issue an $8.95 million bond Thursday to help pay for the new downtown jail after delaying the bond sale from last week because of volatility in the municipal bond market.
The Board of Supervisors meets at 3 p.m. Thursday at the courthouse.
Manufacturing and job data announcements last week, along with a large foreign bond sale failure, led to the market volatility, said Nathan Summers, a public finance banker who is helping Carroll County with the bond sale.
“There was a lot of stuff — noise — in the news cycle that was making bond yields jump all over the place,” he said. “This week, things have quieted down quite a bit.”
The nearly $9 million of borrowing that voters approved last year to pay for the new jail will not cover the project's full cost, because early estimates of that cost were millions of dollars short. The bid for construction that the supervisors approved in September was about $4 million more than expected.
To help cover that funding gap, the supervisors are poised to pay a premium interest rate of 5 percent to investors in exchange for more money up front. Weeks ago, Summers projected the county could net about $1.9 million in additional up-front money, but his revised estimates last week pegged that number at about $1.6 million.
Summer said Monday that he hopes the county will get at least that amount of money, which the county must repay.
The county will repay the borrowed money over the course of about two decades. Its initial borrowing plan allowed for the county to refinance the debt after eight years, which could lower the interest rate, but Summers advised the supervisors last week to extend that number of years to 10 to encourage more attention from potential investors.
That change would increase the amount of interest the county must pay.
The supervisors also hope to modify the jail construction plans to bring down the construction cost and use about $500,000 of their reserve funds to help pay for the project. They also are considering selling county-owned farmland north of Carroll that they have estimated is worth about $1 million.
It’s unclear how much local property tax rates will go up because of the additional borrowing.