Costs run ahead of sales tax

Sales taxes have time to catch up to meet bond payments

Jill Schramm/MDN
A new county office building at right and jail expansion at left are among completed projects being paid for with bond issues and county sales tax.

Jill Schramm/MDN A new county office building at right and jail expansion at left are among completed projects being paid for with bond issues and county sales tax.

At the current collection rate, Ward County’s half percent sales tax will fall about $6 million short of paying off bonds on construction projects, new county figures show.

However, with more than five years of collections left on the 10-year tax, Ward County commissioners on Tuesday took note of the shortfall but consider it too early be concerned. The county has collected more than $33 million from the sales tax already.

The average monthly collection, according to figures from the county auditor’s office, has been $591,432. Collections can vary considerably from month to month. Collections in January 2018 were about $493,000.

When voters approved the sales tax in November 2012, the tax had been projected to generate $39.3 million over 10 years. The money was to go toward construction of a new county office building, jail improvements and expansion and remodeling the Courthouse. Also, $10 million was to go to roads and other infrastructure.

Because construction costs were higher than anticipated, voters in a special election in February 2015 approved another bond issue for $37 million. The tax was not extended because collections were running well ahead of projections, with the likelihood of the tax expiring early once adequate funds were obtained.

With principal and interest on three construction bonds, the county will be paying back $74.3 million. Subtracting payments already made, the county has just over $52 million left to pay. Estimated income if monthly sales tax collections remain at the $591,432 average is $46 million.

However, the auditor’s office estimates about $500,000 will be left over in the construction fund, based on costs coming in somewhat less than the bonds and grant money available.

Approximate construction costs have been: Administration Building, $20 million; Jail renovation and expansion, $40 million; Juvenile detention in the basement of the Courthouse, $2.7 million; and Courthouse remodel, $3.8 million. The total of $66.5 million reflects construction costs only.

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