News Talk 94.1/AM 1600 Where The Upper Cumberland Talks
After paying off bonds for fiscal year 2019-2020, Putnam County will have about $135 million in total debt.
So how much more in bonds can the county afford without having to raise taxes for additional revenue? County Mayor Randy Porter said that all depends on future revenue trends.
“It’s all going to depend on how things happen over the next few years when it comes to sales tax and hotel-motel tax,” Porter said. “If we took a snapshot of right now, you have somewhere in the neighborhood of $75 million to $95 million worth of bonding capacity if we used up all of our revenue coming into debt service currently.”
Porter provided the Putnam County Commission with an update on the county’s bonding capacity this week. The information comes as the county prepares to expand the justice center and build a new school in southwest Cookeville.
Porter said the county’s debt service revenue has ticked upwards for the past several years, going from $17.2 million in 2017 to $19.4 million in 2019.
“If that continues, that gives more revenue in debt service to be able to issue more bonds,” Porter said.
Porter noted that a downturn in the economy would likely have a negative affect on those revenue numbers. In addition, issuing new debt might impact future capital projects for the school system and county.
Porter said a $75 million bonding capacity would require about $5 million in revenue.
“If you use that $5 million in revenue that we’ve been having, then it leaves very little room for capital projects going forward,” Porter said. “I’ve been pushing to increase the amount of capital projects over the last couple of years. Hopefully we can get most of the big-ticket items done and paid for so we won’t have to have as many going on over the next few years.”
The Putnam County Commission voted this week to refinance one of five active bonds. Porter estimated that the county would have $13.37 million in bond payments during fiscal year 2020-2021.
