Kent County Approves Bond Package

March 31, 2008
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GRAND RAPIDS — When county commissioners approved a new capital improvement bond last week worth up to $22 million, at least one prominent official thought a portion of it was a bad investment.

63rd District Court Judge Steven Servaas felt roughly $7.5 million of the bond package that will finance a new 63rd District courthouse in Grand Rapids Township could have been better spent or even not spent at all.

But County Administrator and Controller Daryl Delabbio said once the new courthouse opens on the 5.3 Knapp Street acres that Kent is buying from the township, the county will save approximately $230,000 a year in operational costs for the court. Those savings, he said, will total $11.5 million over the next 50 years and will largely come from merging the court’s locations in Rockford and Cascade Township to the new site.

A major catalyst for a new courthouse has been a claim made by some county officials that the northern district court in Rockford is overcrowded and has been for the last several years. But Servaas, who presides over the Rockford court, told the Business Journal he disagrees with those who have said that his court is filled to capacity.

“I’m up there everyday and we aren’t cramped. The county doesn’t believe me, apparently,” the judge said.

“If our caseload was going up like it was seven or eight years ago, we’d definitely need some room in the near future. But it’s not; it’s on a downward slide, at least in my experience here in the cases we handle.”

Servaas also believes the targeted location for the courthouse is too far from the current site, and outside his jurisdictional boundary, to properly meet the needs of residents in the northern portion of the county.

“I’ve always been against moving from Rockford for a number of reasons, but the main one was there’s no other court up here, and we’re half the county, geographically,” he said.

The new courthouse the county plans to build will have 40,000 square feet of space and three courts. A third court won’t be used until the state assigns another judge to join Servaas and Chief Judge Sara Smolenski in the district. But Servaas doesn’t think the state will make that assignment very soon.

“The state doesn’t have enough money and they’re not going to give us a third judge,” he said.

“If we’re not getting a third judge, if we’re not on some jurisdictional boundary of my jurisdiction so I can at least say that we’re touching it, I don’t really see the reason to spend $7 million in this kind of environment when everything is bad financially. We’ve got a court up here that is satisfactory. We’re not crying for new space or anything.”

The county owns the building that houses the court in Rockford and leases the Cascade court’s space. Servaas said he understands the county doesn’t want to make rent payments on the Cascade court indefinitely, but he argues that isn’t a good enough reason to spend that much money on a new courthouse.

“I don’t see why that requires that they build this $7 million building for three courts when they only have two and they have no estimate as to when they’re going to get a third judge — if ever, meaning if the state doesn’t turn around, I don’t see it happening,” he said.

One thing that is happening is the city of Rockford has filed a lawsuit to keep the court where it is. Rockford officials claim state law requires that each municipality with at least 3,250 residents has to have a court presence.

“It’s a pure legal decision to be decided by the court,” said County Corporate Counsel Sherry Batzer of the city’s suit.

But Delabbio said the county couldn’t afford to operate a court system according to that guideline. He said doing that would require Kent to have two more courthouses: one in Sparta and one in Lowell.

“We’re not going to put a court in every city that has 3,250 people,” he said.

Delabbio also pointed out the county will keep a magistrate’s office open in Rockford after the new courthouse opens.

“I would guess about 85 percent of the business can be done by the magistrate. It depends on the caseload.”

Commissioners gave Batzer the green light last week to prepare “appropriate pleadings” to answer the suit that Rockford filed and threw their support behind Smolenski by joining her in the lawsuit. The city named Smolenski as a defendant in the suit. The county made both moves to protect its interests as the funding source for the court.

The county will pay about $1.5 million for the property, which lies just east of the East Beltline on Knapp, and $6 million to construct the new courthouse. Roughly $14 million of the 20-year bond will go to improve the county’s Fuller Avenue Campus.

County Fiscal Services Director Robert White said the bonds will be bid on May 1 with a closing date set for May 15. The county will make an interest-only payment of slightly more than $1 million on the securities in December and begin making principal payments next year. The annual principal payment will range from $585,000 in 2009 to $900,000 in 2028, the final payment year.

White said the average net interest rate can’t exceed 6 percent per annum and the bonds will mature serially on each June 1. Recent action taken by the Federal Reserve Board to lower the overnight interest rate to banks will not drop the rate the county will pay to bond buyers because that change only affects short-term debt.

White said the county’s Triple-A bond rating and the relatively low level of debt the county carries should make the bonds an attractive investment to bond buyers.

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