Board approves a $6 million bond instrument that will pay for the project and clean up other debt over 12 years.
BY CHUCK VANDENBERG
LEE COUNTY – Some miscommunication on the amount of financing needed for the countywide digital radio upgrade drew attention of Lee County Supervisors Monday morning.
Lee County Attorney Ross Braden told Supervisors he was contacted by several members of the board and the public about the amount being financed in a contract already approved by supervisors in 2020.
According to Lee County Auditor Denise Fraise, the contract for the new system construction and equipment to upgrade all county first responder radios to a digital system, is a 1,500 page document.
The contract calls for a $7.9 million investment in the upgrade, $6.3 million is for constructing and equipping the new system. $600,000 is money that will come from the E911 Board as a pass through from the Public Safety Answering Point (PSAP) and the remaining $1 million is for mandated software upgrades, and other optional maintenance in years 4 through 10 of the contract.
Braden said there is some confusion in the language of the contract that can be cleaned up.
“I believe the understanding to the board and the public was that Lee County was signing off on a contract with the purchase prices of $6.3 million and the final contract price was listed at $7.9 million,” Braden said. “That’s quite a disparity.”
“I was asked to look into that and I didn’t find anything malicious or nefarious in it other than some miscommunication.”
Braden said a lot of the negotiating of the contract was done through the county’s E911 and PSAP boards. Federal Engineering, a public safety company out of Virginia, put together a Request for Proposal based on the statewide ISICS (Iowa Statewide Interoperable Communications System), for the project.
Motorola was the only company to submit a bid for the work.
The additional $1 million is money that has been approved to be spent by the E911 board on the required software upgrades in years 4-10 of the contract. But the funds also include costs of some other options that can be opted out.
Lee County Sheriff Stacy Weber said the county has people in house that can handle some of the options in the contract resulting in savings off contracted total costs.
Weber said that Federal Engineering’s RFP encompassed four 3-ring binders of information and turned into the 1,500 page contract with Motorola. Weber said Motorola is the company that built out the ISICS system in Iowa, and similar systems in other states.
Braden said even though the E911 board negotiated a lot of the contract, they are not a party to the contract, which makes the county the responsible party.
“As far as I can tell that was the intent of the parties,” Braden said. ‘These amounts were included to lock in the rate for the required upgrades that are needed in years 4-10 of the contract.”
Weber said the county agreed and approved covering the costs of the new system and equipment, while the E911 board agreed to pay for upkeep in years 4-10.
“That’s what those funds should be used for,” he said. “But we’ll only spend what is necessary.”
Braden said he sent a letter to Federal Engineering and Motorola outlining how he proposed cleaning up the language of the contract. An official with Motorola said he has forwarded that letter to their legal team and is awaiting a response.
The board also approved a 12-year wrap financing instrument that will include some of the county’s other pending debt load.
In that instrument, the county will set a new debt levy after issuing $5.9 million in bonds, which includes debt on landfill and Lee County Jail construction, which had been consolidated once already, and the Lee County Conservation District’s new building.
The landfill portion is set to fall off the books in the next fiscal year, with the remaining jail debt to be retired in 2023, and the conservation building will be paid off in 2025.
Supervisors approved the 12-year wrap with interest rates ranging from 1.28% to 2.07% over the 12-year life of the bonds.
Under that approval financing, the county would borrow $6.015,000, which includes $105,000 in issuance and underwriting costs to be paid back starting the upcoming fiscal year through 2033.
The move will result in a tax increase of 16.2 cents/$1,000 initially. That number will hover annually from 16.04 to 16.59 over the next six years before seeing a decrease starting in 2029. In that year the total debt levy tax the county charges will drop from 69.96 cents/$1,000 to 45.51/$1,000 and continue to drop until the final payment in 2033.
The county is set to pay about $769,600 in interest payments over the life of the bonds for a total spend of a $6,784,600.
Travis Squires, of Piper Sandler, the county’s bond counsel, said the county is in very good shape as far as debt load.
“Despite the fact you’ve taken on more major projects and your levy rate may be higher, the rate you’re paying it off is very fast and the county is in a very healthy position even taking on $6.2M in additional debt,” Squires said. “It’s still under 10% of your constitutional debt limitation.”
Pflug said that was important for the public to know, and the financing was approved 5-0.
“Taxpayers need to know that,” he said. “I didn’t receive one call on this radio project. This is something we gotta do. We can’t have emergency personnel out there where they can’t communicate with dispatch.”
Weber said the first responders will be able to start using some of the new equipment as soon as financing is secured and the purchases are made. He said the rest of the system build will take 18 to 24 months to complete.
In other action, the board approved Matt Pflug as the new board chair and Rich Harlow as the Vice Chair for the upcoming year, both on unanimous 4-0 votes, with Harlow not in attendance as he drives a school bus and the district was on a 2-hour delay.
New board member Garry Seyb Jr., asked that supervisor meetings be changed to Monday mornings due to his work schedule, and supervisors approved that as well.
Meetings will now be held at 9 a.m. Monday at the North Lee County office building and will continue to be offered via zoom or call in. Pflug suggested moving the meetings around in the county, but until the danger of the coronavirus subsides, meetings will be continue be held via zoom.
Seyb was also appointed as the county’s liaison to the Southeast Iowa Regional Planning Commission and the Southeast Iowa Regional Economic Port Authority. He will also liaison with county secondary roads and Information Technology.