Oklahoma County sells bonds for jail amid future funding worries

Oklahoma County commissioners awarded $215 million of bonds to BofA Securities on Wednesday despite uncertainty over additional funding for a jail project hit by escalating costs.

The competitive general obligation limited tax bond sale marked the remainder of $260 million of debt authorized in 2022 by county voters to replace the existing detention center ? a project now estimated to cost at least $700 million.

County Commissioner Jason Lowe, who cast the only vote against the bond award, said selling the bonds without knowing the fate of a potential sales tax hike ballot measure next year for the project is irresponsible.

"I'm concerned that the voters might reject this proposal and now we're going to have three facilities that we're going to have to fund," he said. "We're going to have to fund the current jail, behavioral center, and also half of the (new) jail. Where are we going to get those funds to fund three facilities? We're having difficulties right now funding one jail."

A mental health facility the county is paying for with American Rescue Plan Act money is being constructed on property where the new jail will be built in phases. The county sold $45 million of the voter-approved bonds in 2023.

The $215 million of bonds structured with serial maturities from 2028 to 2045 attracted seven bids with BofA submitting the lowest at a true interest cost of 3.670349%, according to the county's financial advisor, Zack Robinson, a senior vice president at BOK Financial Securities.

Yields topped out at 4.35% for bonds due in 2045 with a 4% coupon.

The bonds were rated Aa1 with a stable outlook by Moody's Ratings, which warned it could place the rating under review for potential withdrawal if the county fails to produce a final fiscal 2024 financial audit by the end of November.

The county aims to replace its 13-story detention center in downtown Oklahoma City ? which opened in 1991 and has been under state and federal scrutiny for health, safety, and other concerns ? with a jail that includes medical and mental health treatment.