Strong demand drives $50.2 million Habersham bond sale

CLARKESVILLE, Ga. — Habersham County’s new jail moved another step closer to construction Monday after the county completed a $50.2 million bond sale that drew more than three times that amount in investor orders.

Andrew Tripp, a bond underwriter for the county, told the Habersham County Board of Commissioners that investors submitted approximately $164 million in orders for the bonds, allowing the county to secure favorable pricing.

The final blended yield on the bonds was 3.943%.

“It’s an excellent outcome,” Tripp told commissioners.

The bonds will finance the new jail, a project voters authorized through SPLOST when they approved up to $52 million in general obligation bonds last November.

Strong credit rating

Tripp said the county earned an Aa3 bond rating from Moody’s during the process leading up to the sale.

He described the rating as a strong investment-grade rating, with AAA being the only higher rating within that category.

The rating helped attract investors who might otherwise be unfamiliar with Habersham County, Tripp said.

“If we assign a bond rating to Habersham County, then they know a different county that has that same bond rating,” he said.

Tripp said Moody’s cited several positive factors in its evaluation, including the county’s expanding tax base, growing economy and balanced 2027 budget.

The county worked through an extensive review process before the bonds could be sold, including preparation of a preliminary official statement detailing the county’s finances and operations.

Tripp said county officials also participated in credit-rating interviews with Moody’s.

The county’s bond documents were prepared by bond counsel Roger Murray and County Attorney Angela Davis.

SPLOST to cover early payments

The bonds will have maturities ranging from 2028 through 2047.

Tripp said the first six years of bond payments will be made with revenue from the county’s special-purpose local-option sales tax, meaning those payments will not initially rely on property tax revenue.

Commissioner Dustin Mealor asked County Manager Tim Sims how the county plans to handle payments after the initial SPLOST-funded period.

Sims said the new jail is being designed with enough capacity to allow Habersham to house inmates from other jurisdictions.

He estimated the county could house approximately 100 outside inmates and generate roughly $2.9 million annually based on current rates.

Sims pointed to Hart County, which he said is using revenue from housing inmates from other jurisdictions to help pay its jail debt.

“We will be earmarking that money to make additional payments in the future as well,” Sims said.

County expects savings on inmate housing

The new jail also is expected to reduce the amount Habersham spends housing its own inmates in other facilities.

Sims said the county has spent hundreds of thousands of dollars on outside inmate housing and estimated additional savings from reduced transportation costs.

Sheriff Robin Krockum told Now Georgia after the meeting that the county currently pays about $55 per inmate per day in housing fees.

Krockum estimated transportation savings at approximately $100,000 annually once the county no longer routinely transports inmates to other facilities.

He said the county has spent between $300,000 and $600,000 in some years on housing fees alone.

“That’s just the housing fee,” Krockum said. “That’s not counting, you know, whatever overtime or fuel or anything like that we have to.”

The potential revenue from housing outside inmates and savings from no longer paying other facilities are projections and could vary depending on inmate populations and future housing rates.

Commissioners praise bond sale

Commissioners praised county staff and officials involved in securing the financing.

Commissioner Kelly Woodall said the jail is a necessary project that voters approved despite the expense associated with building a new detention facility.

“Nobody likes to build a jail, but you know the conditions of our jail and the need for it,” Woodall said.

Commissioner Ty Akins also pointed to the potential financial benefits of having additional jail capacity.

He said Habersham has spent hundreds of thousands of dollars in some years housing inmates elsewhere and said the combination of reduced costs and potential outside-inmate revenue could make the project financially beneficial to the county.

“It’s unfortunate that we need a jail that big,” Akins said, “but from all indications, communities like Hart County … built a jail big enough to actually house inmates outside of their county.”

Commission Chairman Bruce Harkness thanked the county staff, bond team and others who participated in the financing process.

Harkness said he traveled to New York with Sims and county staff as part of the bond process and said the effort was intended to secure favorable terms for Habersham taxpayers.

Tripp credited county officials for taking a methodical approach to the financing process and being careful with taxpayer dollars.

He said the strong demand for the bonds allowed the county to obtain more favorable pricing.

The bond sale follows the November voter approval authorizing the county to issue up to $52 million in general obligation bonds for the jail project.