Hamilton County government, which is alone among Tennessee's 95 counties in having the top rating from all major bond rating agencies, issued $74 million in bonds Tuesday at the county's lowest rate ever for 15-year notes.
With investors wary about the potential impact of the new omicron coronavirus variant, the county's relatively secure tax-exempt bonds on Tuesday attracted bids from 13 agencies eager for safe, albeit historically low, rates of return on their money. Stanley Morgan submitted the winning bid of 1.355% for Hamilton County's bonds, a full 10 basis points below what the county issued in a similar $62 million bond issue a year ago.
The lower interest charges will save the county about $75,000 a year in interest expenses, according to Hamilton County Finance Administrator Lee Brouner.
"We were very pleased with the results," Brouner said after the debt issue Tuesday. "To have 13 agencies bidding on our bond issue is quite extraordinary."
The new debt will help finance a new Tyner middle and high school and add a needed new industrial park at the former McDonald Farm in Sale Creek, among other projects.
"This is once again on the heels of our Triple-A bond rating by the three top different rating agencies in the country, proof that Hamilton County's sound fiscal governance is respected throughout the financial market," Hamilton County Mayor Jim Coppinger said in a statement after the bond sale Tuesday.
The county bond issue pricing follows a $40.6 million, 10-year bond issue by the city of Chattanooga last week at a record low rate of 0.74457.%.
Both the city and county benefited by the growth in property values and retail activity in the region, which has boosted annual property and sales tax collections for the local governments. The bond rating agencies Moody's, S&P and Fitch all forecast Hamilton County's economy will grow at a faster pace than the U.S. as a whole in coming years.
"Fitch expects the county's revenue performance to outpace growth in national GDP, driven by continued strong tax base growth," Fitch said in its financial assessment of Hamilton County. "The county is experiencing strong growth in the economic base. There are currently multiple projects in different stages of development, within county lines, that will create new jobs."
The bond issue, which will officially be consummated on Dec. 14, will fund $45 million toward the construction of a new Tyner middle and high school to replace the current buildings. Hamilton County Schools pledged an additional $25 million for the new Tyner school using part of Tennessee's share of the federal stimulus funds provided during the pandemic.
The bond issue also will pay the $16 million acquisition cost for the McDonald Farm in Sale Creek to provide more industrial park property for future business development. The county's existing industrial parks, including Bonny Oaks, Enterprise South and the Riverport, are largely full and have limited acreage still available for development. Coppinger hopes to soon close the purchase of the McDonald farm and to begin extending sewer and water services to the 2,170-acre site.
The bond issue also will help fund the renovation and expansion of the current Third Street Juvenile Court building to allow the Main Street Juvenile Court building that handles Juvenile Court child support cases to be closed and merged with the newly renovated and expanded Third Street facility.
The bond issue also paves the way for phase 2 of the Public Works Cromwell Road Facility renovation, including the relocation of the county Highway Department, the county Engineering Department, and other Public Works departments.
The bond sale will also help fund building improvements and renovations at various other government buildings, including the Hamilton County-Chattanooga Courts Building, the historic Hamilton County Courthouse, the MLK Administrative Building and the Business Development Center.
Coppinger said the new bonds also will provide funding for the long-discussed Hamilton County-City of Chattanooga law enforcement firing range on Amnicola Highway to be shared by both the county and the city.
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.