Pueblo County faced challenges stemming from renting several spaces within it’s region that had become increasingly expensive, restricted efficiencies for Social Services staff and creating confusion for those residents trying to use the services. The County made the decision in early 2018 to remodel a building that once served as County Courts and transform it into a single headquarters location for its Social Services organization. County officials estimated it would take approximately $6 million to complete the project.
The County engaged Ehlers for debt issuance & management and financial management planning services. Ehlers learned the renovated property was part of the collateral securing a 2009 Build America Bond Certificates of Participation (COP), maturing in 2039 during initial research. It is also one of three financing’s done under a master indenture format, often placing restrictions on any material changes to collateral. Upon reading the terms of the master indenture, we learned the County could materially renovate the property without having to pledge new collateral. Ehlers recommended COP to finance the renovation.
Ehlers structured, marketed and competitively sold a $6 million COP without encumbering additional County capital. By consolidating Social Services into a single, owned site, the County saves enough money to cover the debt service on the renovation.
Since 2017, Ehlers has also worked with Pueblo County to complete financial management planning for its Community Projects. In 2016, the County voted to restrict the use of funds expected to flow in when certain Tax Incentive Agreements expired. These four agreements would deliver over $60 million to the county in the 10 years following their expiration’s (2020-2022), but were restricted to 20 community projects. The county engaged Ehlers to develop a financial management plan allowing Pueblo to begin projects early, yet still preserve the ability to spend on all slated initiatives. We structured a 13 year plan including a COP issuance and Pay-Go projects and helped guide IGAs with the county’s partners in order to ensure projects were completed as expected and in a timely manner. In mid-2019, the County issued the first grouping of COPs, hoping to bank $12 million for the projects. Via a competitive bond sale, Pueblo gained $2 million of premium and grew the fund to $14 million. The True Interest Cost for the transaction was 2.25%.
*Deb Hinsvark was initially the lead municipal advisor on this project. She has since retired.