Butler County paying down $2.1 million in debt

The Butler County commissioners authorized issuing $7 million in bond anticipation notes for the public safety communication system and a $2.1 million accelerated debt repayment Monday.

The commissioners learned earlier this fall that Motorola, the maker of the public safety communications system, no longer makes the current radios and will not service them past 2018. That came as a big surprise to some of the local jurisdictions that have to pay for their own radios for police and fire staff.

RELATED: Butler County must cut $1.6 million to balance 2018 budget

The commissioners agreed previously to foot the $10 million bill — it dropped from the original $19.2 million estimate — for the new system.

Commissioner Don Dixon told the Journal-News they are paying cash for the $3 million balance of the bill. He said $1 million is coming from the sheriff’s budget, about $1 million will come from the 911 fund and the remainder of the cash payment will come from the general fund.

As for the $7 million in bonds, he said those will be short term debt and will not disturb the plan that erases all general fund debt in 2020, because revenues have exceeded their expectations. He told Sheriff Richard Jones his contribution of $5 million over five years helped make the necessary purchase possible.

“I think everybody knows how seriously we take adding on any additional debt and $7 million is not a small number,” Dixon said. “It’s a short term note, it won’t be here long. We’re still on the 2020 plan, it squeezes us a little bit but by you doing this helped us a lot.”

The original estimate was for replacing infrastructure and about 3,100 radios used by police and firefighters. The new agreement is for an estimated $5.5 million for the infrastructure and 1,000 radios.

Local jurisdictions are responsible for replacing their own radios and there will be 350 radios available under the sheriff ’s new contract for those who want to purchase now. The negotiated price will be good for six months for those that might need to defer.

Jones told the commissioners this has been a long but ultimately successful endeavor.

“This took some time, basically a couple, three years, we knew it was coming,” he said. “You guys prepared for it and thanks to your negotiations, with our negotiations we got Motorola to work with us, so we can pay for this and it will cost us the least possible.”

The board also approved a $2.1 million accelerated debt payment, furthering the goal to be general fund debt-free by 2020.

MORE: Some communities opt out of $19.2 million radio replacement

It was two years ago during budget hearings that Finance Director Tawana Keels outlined the commissioners’ plan to erase all the general fund debt.

The county was about to go over a fiscal cliff just a few years ago but measures such as reining in expenses and most departments ending double-digit raises pulled the county back from the brink.

The accelerated debt repayment plan is expected to save the county about $2.1 million.

The original debt reducing plan showed about $15 million in debt still on the books in 2020, with repayments scheduled out to 2032. Keels recommended the commissioners authorize paying about $2 million in accelerated payments each year. The old schedule had the county paying off about $8 million a year. The plan called for bond and note payments of $9 million to $10 million annually.

Keels said the commissioners’ plan is going as planned.

“We are on track to complete the 2020 plan as you (the commissioners) had commissioned to do,” Keels said. “As a reflection, in 2009 the outstanding principle was $91.3 million, at the end of 2016 you were at $34.9 million, at the end of this year you’ll be at $26.4 million, that’s pretty significant, it’s a 71.1 percent reduction.”

The county is facing some tough financial challenges next year, like the emergency communications system; a $3.1 million hole in the revenue budget after the federal government said they can no longer collect Medicaid Managed Care sales tax and a new law that won’t allow judges to sentence felony 5 offenders to prison — forcing the county to pay for their treatment and or punishment locally.

MORE: Butler County recoups some sales tax loss

Commissioner T.C. Rogers said he was pleased the challenges haven’t sidetracked their debt repayment plan.

“When we came up with this plan two years ago we didn’t anticipate how much was going to happen this year,” Rogers said. “But I’m glad we’re still on track.”

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