The design for a proposed Vigo County Jail has been on hold since last month as the county looks for a source of funding.

The current projected cost of a new jail facility from the Vigo County Board of Commissioners is around $62 million, and long-term funding for the project was clarified this week as the Vigo County Council met.

Herschel Frierson, a senior manager, and Tim Berry, a director in the government group of consultants Crowe Horwath told the council that on a $61 million bond, the long-term cost to taxpayers would range from a projected $100.6 million to about $111.03 million, depending on the term of the bond.

The more than $100 million cost would be over 20 years; the more than $111 million cost would span 25 years. Frierson said the annual cost to pay off a bond at 20 years would $5,175,400, $4,513,950 at 25 years.

However, to better market the bond, the county must have 150 percent of that bond available for payment in the event of an economic downturn or unforeseen event.

That would add more than $2.5 million on a 20-year bond and more than $2.25 million on a 25-year bond.

That means the county would need to have available between more than $7.7 million and $6.7 million annually.

“You would not be paying $6.7 million. The debt service is $4.5 million, but the additional coverage is $2.2 million on top of the bond,” Frierson said of a 25-year, $61
million bond.

Berry later told the county council additional funds could be held in the county’s operating balance, and should no bond payment shortage occur in a year, the county could appropriate those funds as long as the bond reserve revenue was available annually from each year’s tax collections.

Additionally, the longer the bond term, the more cost in interest.

On a 25-year $61 million bond, Frierson said the county would pay about $10 million more in interest than on a 20-year bond. “The annual debt service is less, but you are paying more in interest,” he said.

The accounting firm looked at scenarios of $51 million, $58 million and $61 million bond examples.
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