County commissioners back Burcham on investment program
Lawrence County Commissioners will support County Treasurer Stephen Burcham’s protest of proposed legislation that would affect the county’s Neighborhood Investment Program.
Right now a proposed section in House Bill 459 and Senate Bill 287, which are before the Ohio Legislature, would prohibit county treasurers from being the sole purchaser of bonds issued by governmental entities in their county. That has been the basis of the county’s neighborhood program where Burcham has purchased more than $5 million in bonds since its inception in 2011.
Through the program Burcham has purchased bonds from villages, school districts and the City of Ironton at an interest rate less than what they would have gotten at a bank, but more than the rate the county would get on its certificates of deposit and commercial papers.
Requiring multiple bond purchasers would hurt the program on many fronts, the treasurer said.
“When you have a small issue, it would be difficult for two purchasers,” he said. “The underwriting fees would be more expensive.”
Also splitting a bond with a small dollar amount could make it hard for a village or school district to find a second purchaser.
Last week Burcham told the commissioners that he was sending letters opposing that section to Columbus and asked for them to do the same.
At their Thursday meeting after reviewing Burcham’s letter, the commissioners agreed to send their own letters to various state representatives stating they are against the amendment.
Commissioner Bill Pratt said one of the biggest drawbacks to the amendment would be the search for a second bond purchaser.
“You may not have a bond purchaser and it would force you not to do this,” he said. “The interest rate would probably be higher.”
Burcham reported that first half tax collections were approximately $1.2 million behind collections this time in 2013.
“We have not received several of our mortgage contracts,” he said.
As of Wednesday the county had collected $9.9 million in property tax.
Since the county’s current expenses exceed revenues, the county has agreed to take an advance on the taxes that have been collected.
“About this time, every year, the county general fund experiences a cash crunch,” County Auditor Jason Stephens said in a letter to the commission. “This year is no different. Revenues through February were $1,296,230 and expenses paid were $1,690,645.”
At the end of February the county’s cash balance was $370,000 with more than $400,000 in unpaid expenses.
“March will have anticipated revenues of about $425,000 and anticipated expenses of about $525,000,” Stephens wrote. “So as you can see, the cash flow for the month of March will be negative as well. “The general fund cash carryover on Jan. 1 was about $764,000. … It is not enough cash to carry the county through the first four months of the following year.”
After all first half taxes are collected and reconciled, the county’s general fund portion will be reduced by that advance.