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$23M bond could fund DHS plans

By Michael McNutt Published: November 30, 2007
A proposal by the state Department of Human Services that includes replacing its outdated emergency children's shelter in Tulsa will move forward.

The state Council of Bond Oversight approved the request Thursday to issue up to $23 million in revenue bonds to build a new shelter in Tulsa, buy an office building in Tulsa and build new offices in Ada and Sapulpa. Estimated cost of the four projects is about $21.65 million.

The Oklahoma Development Finance Authority will handle the 15-year bond issue. It will lease the buildings to DHS until the bonds are paid off; ownership then would transfer to DHS.

Plans for the shelter consist of building three cottages and an administration building on 20 acres in northeast Tulsa. The three cottages would have 42 beds and eight cribs.

The bond issue would provide an estimated $6.4 million for the construction. The shelter would take up about half the land; the remainder could be used later for building group homes for the developmentally disabled, said David Shafer, chief administrative officer for DHS.

The new shelter is needed for safety purposes and because the old facility is overcrowded and serving growing numbers of children, he said.

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State's debt burden manageable, report says
The state of Oklahoma has a way to go yet to reach its borrowing capacity, according to a report prepared by the state's bond adviser.

Payments this fiscal year for the state's approximately $1.5 billion in various bond issues will total about $157 million, or about 2.6 percent of the state's general fund appropriations of about $6 billion, said Jim Joseph, the state's bond adviser.

Based on existing bond issues, the state's total annual debt payments continue to decrease the next three years as the general revenue fund increases, the report states. The percentage would be 2.2 percent for the 2012 fiscal year, which begins July 1, 2011.

Increasing the annual debt service to 3.5 percent of the state's general fund appropriations this fiscal year would mean the state could finance an additional $836 million in 25-year bond issues; increasing the annual debt service to 3 percent would mean the state could finance an additional $376.8 million in 25-year bond issues, according to the report.

"It depends on what level you feel comfortable with,” Joseph said. "If you think 3.5 percent is a comfortable level, then you can do a lot more borrowing.”

Oklahoma consistently ranks among the lowest debt per capita. One rating agency, Moody's ranks Oklahoma 39th in debt per capita.

"We need to be careful not to restrict our borrowing to the extent that it affects our major maintenance and keeping up with our infrastructure needs,” Joseph said. "I don't think we're by any measure overextended. The capacity is there.”

Michael McNutt, Capitol Bureau


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