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On
November 4, 2003, voters in Lincoln and Sagadahoc Counties authorized
the issuance of $24,600,000 in bonds to finance construction of a jail
facility to be owned and operated by the Authority and to serve
primarily the two counties. The Authority completed the sale of the
bonds in the amount of $24,600,000 to finance construction of the jail
on June 21, 2005 to Merrill Lynch at an interest rate of 4.115% at a
premium of $442,380. Bond issuance costs were $432,378. The Authority
received a BBB rating from Standard & Poor’s. For comparison, other
significant sellers in the market that sold on the same day include the
AA-rated City of San Francisco @ 4.17%, AA-rated Los Angeles County MTA
@ 4.27%, and AAA-rated Norwalk, CT @ 3.89%. Each county will
guarantee the payment of, and will pay, 50% of the principal and
interest on the Authority bonds. The bonds are dated
June 1, 2005 and are payable over 25 years. The first interest
payment of $630,000 is due December 1, 2006, and semi-annually after
that. The average yearly cost to each county over the 25 years is
$635,000.
On March
15, 2004, each County took out a Bond Anticipation Note in the amount of
$1,500,000 to fund temporarily the costs of the construction of the jail
facility, in anticipation of the receipt of permanent bond proceeds.
The note was through Banknorth, N. A. at an interest rate of 1.39% per
annum, and both principal and interest was due March 15, 2005. As the
sale of the bonds had not been completed by that date, the Commissioners
of both counties extended the maturity date of the BANs to June 30, 2005
and increased the total amount in each county to $2,000,000 through an
Allonge to the note at an interest rate of 2.49%. The principal of
$4,000,000 was paid off by the bond proceeds on June 30, 2005. The
interest on the BAN had been budgeted for and was paid by each county.
Operating revenues
for the administrative expenses of the Jail Authority office are shared
equally by Lincoln and Sagadahoc Counties. The total operating budget
approved by the Authority for fiscal year July 1, 2005 - June 30, 2006
is $1,002,000. Each County is budgeted to contribute $501,000 for
fiscal year 2006 to support the Jail Authority’s operating budget.
When the jail is
operational, each County's share will be determined by a
Cost Sharing
Agreement including a per diem rate based on inmate
residence. The Authority originally estimated that one year’s
operating costs will be approximately $4,525,000 (in 2004 dollars) which
will be offset by estimated revenues of between $548,000 and $730,000
from boarders.
Audit Firm
Baker Newman & Noyes
The accounting firm of Baker
Newman & Noyes of Portland, Maine has been hired to perform audit
services for the Lincoln and Sagadahoc Multicounty Jail Authority. With
approximately 150 employees, Baker Newman & Noyes is one of the largest
firms in northern New England and among the largest 100 accounting firms
in the United States, with offices in Portland, Maine and Manchester and
Portsmouth, New Hampshire. They serve as auditors for a significant
number of governmental and other entities which report under various
federal and tax compliance requirements.
The 2005 audit is available
by contacting Mary Sue Weeks at
882-4268, Ext. 10.
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