Cape County gives green light for tax compliance services proposal

The Cape Girardeau County commissioners approved a post-issuance tax compliance services proposal during their regular meeting Thursday, July 18.

In January 2023, the county issued $32 million in bonds with a fixed 3.52% interest rate to help pay for the new jail currently under construction. The county did not use the money immediately, so it was deposited into a bank where it accrued interest.

“By law, we’re not allowed to participate in tax-free bonds. You can’t earn more interest on the money that you borrowed than the rate at which you bought it. The difference is called arbitrage, so you have to pay that back to keep your tax-free status on the bonds,” Presiding Commissioner Clint Tracy said.

Therefore, the county agreed to pay $7,500 to GilmoreBell law firm, the issuing bond agent, to conduct an analysis on how much the county would have to pay back over the coming years. County Treasurer Roger Hudson said this was being done earlier than the county was required to, as it is normally only required after five years. However, since the bond funds will be spent by the end of the year, officials thought it prudent to do a preliminary arbitrage calculation to determine where and how to rebate the money if necessary.

Additionally, the commissioners approved a pay request from Sides Construction of Jackson in the amount of $464,848.30 for work on the Cape Girardeau County Emergency Operations Center.

“It’s getting close to the end of the project … probably the next pay request they’ll be asking for the retainage,” Associate Commissioner Paul Koeper said. “A portion of this is going to come out of the ARPA (American Rescue Plan Act) funds, and that will complete the ARPA funds designated for that project. The remaining amount will come out of the capital (funds).”

Any future payments for the project would also be paid for by capital funds, Koeper added.

The commissioners also approved a memorandum of understanding between the Cape Girardeau County Sheriff’s Office and Community Counseling Center in Cape Girardeau. This was in regard to the sheriff’s office having applied and accepted a grant for an assistant to its existing counselor in working with its inmate population.