Schuylkill County commissioners will borrow $7,341,000 at 3.47% interest over 10 years to pay for the upcoming reassessment and its costs and expenses.

The cost to the county will be $8,844,256.63.

All three commissioners, Gary J. Hess, George F. Halcovage Jr., and Chairman Barron L. Hetherington, on Wednesday voted in favor of the loan.

The county will take out the loan through M & T Bank, Pottsville, and pay interest on the loan from the date of delivery, expected to be March 15, to Nov. 1, 2033, unless it’s paid in full before that. There’s no prepayment penalty.

The repayments on the principle are due on Nov. 1 of each year, and the interest is due on May 1 of each year.

For example, the county will pay $803,915.53 on Nov. 1, 2023, and $116,192.95 on May 1, 2024.

The interest is tax exempt.

Budget transfer

In a related action, commissioners approved an $804,000 budget adjustment for the county administration. County Financial Director Paul E. Buber said the action, which shifts funds from one line item to another, was to make the first payment on the loan.

The money was budgeted in November or December, he said. Initially, the county anticipated a bond issue to pay for the project.

“But the financial markets have changed in several different ways. Since that time, after re-evaluating what was going on in the marketplace, it seemed like a better direction to go in is a general obligation note,” Buber said.

The loan process was “time consuming and complex,” he said.

The county, with PFM Financial Advisors, which serves as its financial advisor, circulated a request for proposals to banks and financial institutions to solicit proposals for the loan.

The county authorized Eckert Seamans Cherin & Mellott, Harrisburg, to handle the legal matters associated with the loan.

Each firm was paid $37,500.

PFM Director Jamie Schlesinger and Attorney Jennifer M. Caron of Eckert Seamans attended Wednesday’s meeting.

Each described their firms’ responsibilities in guiding the county through the loan process.

Schlesinger called the loan “unique.”

“You do not see a tremendous amount of reassessment financing. They have been done throughout the Commonwealth,” he said.

Delaware, he said, paid cash.

Bond rating

PFM’s work in analyzing the market resulted in the county receiving 12 qualified proposals. The county’s high bond rating is AA2, “two notches below the best you can be,” Schlesinger said.

That allowed PFM to get the lowest interest rate possible, he said.

That, along with the best proposal, saved the county interest expense of $630,000 over 10 years, Buber said.

Caron’s work in getting the tax exempt interest saved $380,000 over 10 years.

Halcovage said he’d like to use federal pandemic funds to offset at least part of the loan.

“The bond rating we have is excellent. We did look at all the options,” he said. “I was hoping to use some of the lost revenue money we received from (American Rescue Plan Act) toward helping to pay for the reassessment.”

He said he’ll continue to look into that possibility. The county received $27 million in ARPA funding.

Hetherington thanked all involved in the financing for their work and expertise in getting the county the best package possible.

He expressed gratitude to Buber and his staff and County Administrator Gary R. Bender for spending a lot of time performing “due diligence in deciding whether it would be a bond or a loan. They did an excellent job making sure the terms were good for us,” he said.

Hess pointed out the financing isn’t set in stone.

“I think we did this a number of years ago, when we did an obligation note rather than a bond. I think it was for voting machines. And after that, with better interest rates, we rolled it over into a bond. So it’s something similar to what we’ve done in the past.”

Schlesinger responded, “We did the same concept here. We evaluated both sides of it, and if we choose to, we have the option to refinance if necessary, which gives us the flexibility to save additional money.”

The reassessment, the county’s first since 1996, came as a result of a lawsuit filed by the Community Justice Project, a Harrisburg nonprofit group that has filed - and won - several such suits across the state.

The Community Justice Project’s 2018 suit argued the county tax burden is unfairly distributed due to the 26-year gap in property value reviews.

Rather than continue to fight the suit, the county in May settled with the group.

The reassessment project will take about three years, so the new assessed values will be able to be used to set taxes no later than Jan. 1, 2026.

Commissioners in December hired Vision Government Solutions Inc., Hudson, Massachusetts, for $6.6 million to perform the reassessment.

The firm will also charge additional fees for extra services, plus $144,500 a year for a subscription to CAMA software. That rate is fixed for the first year and two subsequent one-year option years.

And it will charge a one-time software fee of $375,000, to be paid in four installments.

Included in the package is a contract with Eagleview, of Bellevue, Washington, for about $188,524 for aerial photography.

Trained data collectors will soon begin gathering information from property owners through data mailers, site visits and in-person interviews.

Property owners will be notified by the county before June 1, 2025, and given an opportunity for an informal review and the ability to correct any data errors.

Change of assessment notices will be mailed on or before July 1, 2025, with the new value, and property owners can begin the formal appeal process to the county Board of Assessment Appeals. The new assessed values will take effect Jan. 1, 2026.