The IRS report, released to the authority last week, also shows that the county “miscalculated” how much the bonds would pay off for investors.
The document does not reveal the specifics of the miscalculation, but Dillingham commented that “the county will take the yield (percentage rate) ... to six decimal places rather than the four used previously” as it makes future calculations.
“Despite the economic recession of 2008-2009, the authority invested the bonds at the most attractive rates available, yet the rates were historically low,” Dillingham said.
The IRS report indicates that the bonds issued by the Cleveland County Justice Authority will retain their tax-exempt status. It also states that the funds will have “limitations” as to their use in the future.
Dillingham described the IRS findings as a “major accomplishment for Cleveland County and its residents.”
“We now have a modern, well-equipped, efficient county jail that came in well below budget,” she said. “The county has retired $13 million of the bond debt, years ahead of schedule, and could terminate the tax well before its 20-year term.”