Rogers County Industrial Development Authority, RCIDA met Wednesday to discuss the future of the organization and an exit strategy for dissolution.
“Make no mistake, today we are on our way out of business,” Executive Director Mickey Thompson said. “We have a responsibility to manage that as best we can to do the service we are obligated to do for the taxpayers of Rogers County.”
RCIDA is an Oklahoma public trust authority created in 1980 for the purpose of assisting small business to develop and provide jobs and economic, educational and cultural benefits for the people of Rogers County.
“It has been a full two years since we have received funding from the county,” Thompson said.
During the 2009-10 fiscal year RCIDA received approximately $600,000 in use tax collections, however by January 2011, the relationship between RCIDA and Rogers County changed, permanently affecting funding.
Previously funded by the receipt of all Rogers County Use Tax collections, the organization adjusted their budget after the creation of the 2010, $23.5 million and 2011, $3.25 million courthouse/E911 center construction bonds.
The two bond issues were written through RCIDA the “Authority” with Rogers County being the “Beneficiary” and RCB bank serving as the “Trustee”.
Several attorneys worked on the two bond issues and were compensated accordingly, yet RCIDA was provided no funding through the transaction.
For example the $23.5 million courthouse bond paid Attorney Thomas Hilborne approximately $176,00, the Baker Financial Group $183,000 and provided for an annual debt service fee to be paid to RCB bank, all of which were paid from bond proceeds.
Attorney Larry Steidley, RCIDA legal council, received approximately $95,000 paid directly from the organization’s budget.
RCIDA paid Steidley to represent their interest, but due to a failure in negotiations all of the organization’s use-tax funding was used as security for the bonds eliminating their long-term revenue stream, according to RCIDA board members.
The board said in 2010 they considered the two construction projects to be Rogers County economic development, something they strongly support.
As a result the board agreed to Steidley and Assistant District Attorney Barry Farbro’s bond proposal, with the understanding that Rogers County would continue to provide funding.
In addition to the first bond the $3.25 million bond provided additional payments to the attorneys involved, however once again RCIDA received nothing.
In the 29 years of service, RCIDA saved a substantial amount of the use-tax funds received each year to build a reserve for large purchases, according to Thompson.
For example the organization used more than $800,000 of their savings to invest in the construction of the Jim Summerlin Industrial Park in Inola.
Once the bonds were written the organization became dependent on the county commissioners to provided funding with remaining use tax monies not spent monthly to pay make bond payments.
County Commissioner Dan DeLozier explained Friday the intent of the Board of County Commissioners was always to continue funding RCIDA.
“We had to wait to make sure there was enough money to pay the bond each month,” DeLozier said.
The down turn in the economy affected the amount of tax collected, according to DeLozier.
Commissioner Kirt Thacker echoed a similar statement, Monday praising the economic development efforts of Thompson.
“The jobs that Thompson and his crew create will more than pay for the investment,” Thacker said.
Commissioner Mike Helm did not provide comment on the issue. Helm’s email correspondence with Attorney Barry Farbro in November 2010 reveals his intent to limit funding.
“Barry, I believe they [RCIDA] are getting all the money that I want to give them. If they need more, then it would be on a case-by-case objective. Is this the direction we are going? I’m just 1/3 of the vote,” Helm wrote.
Thacker has placed the issue on the April 15 BOCC agenda for discussion and possible action.
It is unclear if RCIDA will get the support of all the commissioners on Monday, however the county has approximately $700,000 in excess use tax available at this time.
Thompson and his board of trustees have scheduled a meeting on April 18 to continue funding discussions.
“We need to make some plans if we are going to have to go out of business,” Thompson said.
RCIDA is a public trust and cannot cease to exist unless all its debts are paid. The trustees can resign and new trustees can be appointed, but it cannot cease to exist as long as the bonds are outstanding, according to Karen Keigley, vice president RCB Corporate Trust.
The project agreement between the RCIDA and the county is for the benefit of the bondholders, it is security on the bonds and is required by the indenture to be renewed annually by the county and authority, she added.
The county signed an agreement with RCIDA in August 2012 for the current fiscal year, however the contract does not include funding for the organization.
The RCIDA board will review three options for continued operations next week, each dependant on the commissioner’s decision.