HOLLLIDAYSBURG - Blair County leaders are hoping to use revenue from current debt taxes to cover the cost of the first real estate reassessment since 1958.
If that's the case, no tax increase will be needed to pay for reassessment, which is being estimated at $3 million to $4 million.
"That's good news," Commissioner Diane Meling said in reaction to a projection offered by county Finance Director Robert Kuntz.
In 2016, the county is scheduled to pay off its 2001 bond issue arranged for the courthouse expansion project, Kuntz said Wednesday.
While the county's payments on its 2011 bond issue are scheduled to increase in 2017, those increases won't be as much as the 2001 bond payments. That leaves revenue available to cover new debt and possibly for reducing the county's debt millage, Kuntz said.
Commissioners, who voted Tuesday to initiate reassessment, advised Kuntz to continue looking into the options for covering the cost of reassessment.
A closer look
Blair County currently levies a general fund tax levy of 27.495 mills to support its 2014 budget. The state permits the county to levy as much as 30 mills to support its general fund.
In addition, counties are permitted to levy taxes specifically to cover debt payments. In 2014, that tax for Blair County property owners is 3.796 mills.
From research so far, Kuntz said the county could consider another bond issue, like the one arranged in 2011 to upgrade the 911 communication towers and additional expenses. It could also consider a bank loan, Kuntz said.
With a bond issue, Kuntz said the county incurs higher upfront costs, but it gets a lower interest rate. The county may also be able to defer payments until 2017, the year after it finishes paying off the 2011 bond issue.
"Then we could keep debt service millage at current levels," Kuntz said.
While a bank loan would have no upfront costs, Kuntz said it would carry a higher interest rate. Another factor to consider, he told commissioners, is that it would take the county months to arrange a bond issue while a bank loan will take weeks.
For his research, Kuntz said he was using a figure of $4 million.
When Commissioner Terry Tomassetti asked how he came up with that amount, Kuntz said he was aware of estimated costs of reassessment.
"I used a guess, on the high side," Kuntz said.
Chief Clerk Helen Schmitt also mentioned that if the county wants to set up a bond, it will need to hire a bond counsel. County solicitor Nathan Karn worked on the 2011 bond with Christopher Brewer of Dinsmore & Shohl LLP of Pittsburgh, Schmitt told commissioners.
She estimated the fee for his legal services at $10,000 to $12,500, which could be covered with bond issue proceeds, she said.