Delaware County has announced the creation of an innovative, first-of-its-kind program in conjunction with the Delaware County Finance Authority (DCFA) that will assist local governments in paying for capital improvement projects. The strategic investment plan will put inactive county funds into a bond program to be used by governments at rates significantly lower than they would find in the public market, while also keeping those interest dollars in the county.
Liberty Township, which currently has three significant projects in the works, will be the first to benefit from the program’s initial $50 million in funds.
“We worked on it, I think, pretty hard over the last four years to try to get it to where we could make it something really special,” Delaware County Treasurer Don Rankey said of the program during the Liberty Township Board of Trustees meeting held June 21. “I think … this will be a first for any county in Ohio. My office is in the process of launching an innovative program to put Delaware County and our local citizens’ tax dollars to work. Instead of using a bank loan, bond, or special levy for the financing of new capital projects in Liberty Township, this program can be utilized for the planned township offices and hall, for the new roads maintenance facilities, and the replacement of this fire station.”
Rankey said it was no accident he was in front of the Liberty Township Board of Trustees to first announce the program, telling the board they have “done a great job,” and “the financial strength of Liberty Township can attest to it.”
“The program provides the ability for the treasurer to purchase your capital building project bonds and provide financing through year 10 of a project with a collaboration with the DCFA and your municipal bond advisor offering years 11-20 to the public markets,” Rankey said.
Rankey went on to say the combination of the financing strategy will save the township substantial fees and interest payments, adding he believes the program will cut interest in half and fees by more than half of what they would otherwise be.
“The real win is for all the taxpayers and residents of Liberty Township as it puts the county’s inactive finance resources to work locally at a much better rate of return than could have been obtained in a public market at this time,” Rankey said. “And the interest earned stays in this county and helps to minimize associated financing costs.”
“We’ll never, ever again have this kind of buying power at this affordability,” Trustee Bryan Newell said of the program during the June 21 meeting.
Newell told the Gazette, “It’s huge in so many ways. We’re not going to have to go to anybody for any tax increases. We’re going to get new facilities that are going to be easier and cheaper to maintain, and they’re going to last 50-plus years. We would never be able to do that at any other point in time, as economically as we’re doing it now.”
Rick Karr, Liberty Township’s fiscal officer, said the inactive fund simply means excess cash on the balance sheet that is not being utilized in the county’s daily operations. The county’s investment dollars, which currently earns essentially nothing where they’re currently held, will now return interest dollars at 1.75% back into the fund. Karr said that interest rate is significantly better than the .08% rate those dollars receive with STAR Ohio or worse with First Commonwealth Bank.
Rankey said the county engaged with Fifth Third Securities to do a study of the county’s investment dollars as they previously sat over the course of the past year. The results, he said, showed the county has lost out on the opportunity for close to $2 million in funds over the past four or five years due to the lack of earnings on the money.
With the additional revenue coming to the county as part of the program, DFCA Treasurer Dave Stadge believes Delaware County can begin looking for development deals that will put the county on par with what is happening elsewhere in central Ohio.
“The (Delaware County) Finance Authority, for quite some period of time, had been looking for a mechanism to get a bond fund established,” Stadge said last week. “Without having some form of sustainable and predictable income, it just wasn’t going to happen. And this gave us that opportunity. We’ll be able to do the deals we need to do, get them certified, and get a bond fund established, and that lets us play with Franklin County, Montgomery County, Cuyahoga County, and the rest of them. Quite frankly, if you look at how development is going on here in central Ohio, right now, Delaware County is not getting its fair share of opportunities that are going to some other counties. This will let us change that.”
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @DillonDavis56.