Orangeburg County is beginning to plan for the construction of a new courthouse.

“Our courthouse has been basically extended past its useful life,” Orangeburg County Administrator Harold Young said during a two-day county council retreat held last week.

“Renovation after renovation, we basically have lost the ability to stop leaks within the courthouse. We are at a point now it is past the point of no return just like we were with the jail,” he said.

The courthouse was built in 1928.

“We are still working on the same foundation of that building,” Young said. “Even with the renovations that have been done over the years, the bones of the building just can’t sustain so much more.”

The current courthouse is too small for the needs of the county, Young said.

It has one large courtroom and several smaller ones. Young said the county needs at least six large courtrooms.

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He also noted the state will be trying to provide an additional family court judge to help speed up case backlogs.

“We are pressed because it is not big enough as it is and it is not sustainable to put the amount of money to rehab it all the way through because … when you go through as many renovations as this building has, at some point you can do so much to keep the structural integrity together,” Young said.

Based on recent courthouse projects in Florence and Dorchester counties, the cost of a new courthouse would be anywhere from $30 million to $50 million, Young said.

The location of the new courthouse has not been determined.

Under state law, the courthouse needs to be located within the city limits of the county seat, which means a new courthouse will have to be located in Orangeburg, according to Young.

Young noted the location of the courthouse will impact the property around it.

For example, Young estimated about 90% of Orangeburg’s lawyers are located near the courthouse. A new location could cause a ripple effect on existing law firms.

Young said there have also been some discussions about possibly building a parking garage as part of the project, depending on land availability. He said the City of Orangeburg has also been engaged in the discussions.

Orangeburg County Council authorized county staff to proceed with due diligence such as studying costs, engaging an architect and engineers, conducting a feasibility study on the scope of the project and finding possible locations for the new building.

“I hope it can be a successful venture,” Orangeburg County Council Chairman Johnnie Wright said.

Young does not expect the project to increase taxes.

He said the county would most likely need to issue a $3 million general obligation bond to be able to conduct due diligence and purchase the land.

The bond would be for about 15 years with a 3% interest rate. It would increase the county’s maximum annual debt service to $4.8 million.

The county is considering paying for construction through an installment revenue purchase bond, which will allow the county to pay down the bond debt with $1 million installment payments rather than in a lump payment of $50 million.

“We have been very good and cautious with our debt, so we are in a good position debt-wise where we have some major things that are falling off,” Young said. “We can also look at having a financial strategy when we do these projects so we don’t just do it willy-nilly.”

Under the installment revenue purchase bond, the county would not have to ask voters to approve the borrowing, like it would with a general obligation bond.

Young did note that the installment revenue purchase bond does cost a little bit more than a general obligation bond because of accounting and legal processing fees.

A $50 million installment revenue purchase bond with a rate of 4.25% over 25 years would mean a maximum annual debt service of $6.7 million, compared to a maximum annual general obligation bond debt service of $6.6 million.

The installment revenue purchase bond would give the county an estimated debt service of $86.3 million over the lifetime of the bond. A general obligation bond would bring a debt service of $82.1 million.

With the installment revenue purchase bond, the debt service millage would be maxed at about 25.26 mills as compared with the 24.88 mills of a general obligation bond.

The county’s current debt service millage is 15.29 mills.

With the estimated debt service millage for 2023 at 18.23 mills ($265,765 per mill), which includes the land purchase for the courthouse, the installment revenue purchase bond would add an additional 7.03 debt service mills to the county.

Young said by going the route of the installment revenue purchase bond, there should not be a tax increase as the county’s industrial growth would help to cover the debt service payment through the fee-in-lieu of taxes. He noted that most fee-in-lieu payments are between $200,000 and $300,000 annually.

If a general obligation bond is chosen as the financing mechanism for the courthouse, it would increase county debt service mills by 6.65 mills.

Young said despite the increase in costs, it is less risky to use the installment revenue purchase bond because it is spread out over time and does not impact the county’s 8% debt limit.

The county cannot issue a general obligation bond in an aggregate principal amount that exceeds 8% of the assessed value of taxable property in the county unless the voters approve it in a referendum.

Young said protecting the debt limit is key in the event the county deals with a catastrophic, unforeseen event.

Young also said if the county were to go with a general obligation bond and pay the $50 million in one lump sum, it would “pretty much sacrifice the entire fifth penny on just the courthouse.”

“That probably would not work,” Young said.

Young said the county used the installment revenue purchase bond payment process in the construction of the current county jail and has been able to get good interest rates because of its A credit rating.

He also said the bond could be paid back with proceeds received from the fifth round of the 1 percent capital projects sales tax if voters approve the fifth round in a referendum.

Young said the fifth round will come before voters most likely in the 2024 general election.

The fifth penny could generate an estimated $81 million for capital projects over the seven-year term of the tax, if it’s approved.

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