County votes 4-1 to fund roads with bonds

After a lengthy discussion, Sedgwick County commissioners on Wednesday agreed they will need to issue general obligation bonds to pay for road maintenance projects.

The vote was 4-1, with Richard Ranzau dissenting. He argued that the money should come from the county's reserve fund instead.

The resolution was the first step in a process that will require more consideration by commissioners as well as a chance for opponents to petition for approval by voters.

The bonds would pay $4 million of an $8 million maintenance project on 98.7 miles of county roads.

The improvements have a five- to seven-year life, so the bonds would mature within seven years, said Chris Chronis, the county's chief financial officer.

An additional $60,000 would be required to cover the costs of the transaction.

The bonds are scheduled to be sold later this year and are included in the county's capital improvement program and in its 2011 capital budget, Chronis said.

But Ranzau said the county needs to consider new ways to fund such projects.

"Roads and bridges are an essential part of what we do here, and I don't think we should fund this out of debt. I think we should pay as we go," Ranzau said.

He recommended the county take the money from its reserve fund and pay it back over time.

Ranzau estimated that his approach would save taxpayers about $560,000 in issuance costs and interest over six years.

Chronis said the county already is on course to lower the reserve fund and deplete it at the end of five years. Taking $4 million out in a single year would mean the fund would hit bottom sooner, he said.

The county expects to incur deficits for the next couple of years, but hopes to eliminate them after 2012.

Commissioner Dave Unruh said he supported the resolution because the county has a conservative debt policy that has kept it out of trouble.

"We keep a high bond rating because we do a good job," Unruh said.

But, Ranzau said, "This is not about a bond rating. This is about a better way to do things. Just because we've done it the same way doesn't mean it's a good way."

Commissioner Jim Skelton supported the resolution because "We have to have contingencies for natural disasters," he said.

Commissioner Karl Peterjohn called the resolution "reasonable," although he added that he has an aversion to debt and is concerned about whether the county would have to use bonds on other items in the capital improvement plan.