May 21, 2014 - By Eric Blom, Staff WriterA new plan to fund the Riverton justice center is to make use of an extra $1 million in a county account, potentially lowering the amount that will have to be paid back. Fremont County Commissioners approved the move May 20 as part of a budget transfer intended to signal their readiness to move forward with the project.
Officially, the budget amendment authorizes a $1.98 million loan from the county's capital revolving fund into an account for the justice center project. The same resolution approves a new revenue of $2.5 million from the State Loan and Investment Board, which would go into the same account.
The move paves the way for a $2.5 million grant from SLIB commissioners hope to receive in June.
One reason to move the nearly $2 million transfer from capital revolving at this point was "ensure the SLIB board we are encumbering our share of it so as we move into this project money is available, not in various accounts," commission chairman Doug Thompson said in an interview.
Drawing on the capital revolving fund rather than the county's cash reserve, as commissioners previously expected, could save the county money.
The Fremont County Treasurer's Office found there was $1 million more in the capital revolving fund than was needed.
Every year, money from that fund is used to pay for equipment, vehicles and capital projects, such as buildings. Departments receiving a new piece of equipment, for instance, pay back to the fund the cost of the item over its lifespan plus interest, similar to a loan payment to a bank.
Year to year, repayments are supposed to roughly match new purchases, allowing the money to "revolve."
There is about $1 million more in the fund than would be needed for yearly purchases, Thompson explained. Drawing nearly $2 million of it, though, might require the county board to move money into it during the budgeting process this summer so it can make purchases this year.
Commissioners have not formally adopted a repayment plan but are considering not repaying the excessive $1 million.
"We may not have to if we're carrying an excessive amount in that fund," Thompson said.
At the meeting, Fremont County Clerk Julie Freese, at the meeting, recommended repaying $250,000 per year for 10 years and charging 3 percent interest on the
$2 million borrowed. The issue may not be a concern for the current budget as she recommended starting repayments in the next fiscal year after the project is completed.
She recognized the possibility of not repaying the $1 million as well.
"It's my hope you maybe don't have to pay back that much if you don't want that much cash in the capital revolving fund," Freese said.
Thompson, in an interview said the excessive $1 million did not accumulate through poor management, but rather the county bought fewer items in recent years, allowing repayments to the capital revolving fund to outpace expenditures. Now, it made sense to use the money for the justice center.
"If you have excess cash and the ability to borrow, use your cash first," he said.
Commissioner Travis Becker, who has led planning of the justice center, last fall proposed borrowing about $2 million from the county's $7.5 million cash reserve and paying it all back with interest.
Compared with that plan, drawing on the capital revolving fund and not paying back $1 million of the expenditure would allow the county to make smaller repayments and save money or repay the "borrowed" money in less time.
Commissioners Keja Whiteman and Stephanie Kessler voted against the budget transfer.
"I'm not sure if that's the best use of that money," Whiteman said about the extra $1 million in the capital revolving fund. "(And) this whole process is feeling rushed and reactive, and I'm getting the feeling this is not the priority for people in Fremont County as far as an investment."
Commissioners Thompson, Becker and Larry Allen voted for the move.
"A huge amount of our criminal activity occurs within a five-mile doughnut of Riverton, and it just makes sense to have a facility in Riverton that can administer justice. For safety and security, that facility should meet the needs far into the future," Thompson said at the meeting.
The most recent estimate in April from architects of the project's total cost was $5 million. A SLIB grant could only cover half the project. In December, Becker explained the county could count the $100,000 value of the land it is using for the building, the amount it is paying architects to design the building, about $400,000, and another $144,000 grant towards its half of the project in addition to any cash it contributes.
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