County Board debate merits, then vote to borrow
Pierce County supervisors voted Tuesday to proceed with borrowing $1.695 million and offer bonds for sale, but the 12-5 vote could be a problem later.
The board's bond counsel has advised the plan needs a yes vote from at least 13 supervisors--either at Tuesday's meeting or when another vote is taken in May. Failing to get the 13-member vote in May, after the bond sale, could seriously harm the county's ability to borrow any money later, warned Joe Murray of Springsted, Inc.
Four of the supervisors who voted against the loan Tuesday either did not seek re-election or lost and won't return to the board when new members are seated later this month.
Those who voted against borrowing argued the county should instead be spending money it already has on the building repair and bridge replacement projects.
Those who voted for borrowing countered the county can expect to earn more on its investments than it will pay to borrow, in part because a federal economic stimulus program will cover 45 percent of interest costs.
Supervisor Jeff Holst, Town of Diamond Bluff, who serves on the finance committee, distributed an email from Institutional Capital Management showing the county's average yield on its investments over the past nine years has been 3.9 percent, but the interest rate earned last year was 2.38 percent.
For more please read the April 21 print version of the Herald.