Major funding for the Deschutes County jail expansion will come from an $8.4 million bond to be repaid jointly by the Sheriff’s Office and the county general fund, according to the Deschutes County Commission.

At a Wednesday work session, the commission heard county Finance Director and Treasurer Marty Wynne outline several options for funding the project.

The $11 million expansion would add 144 beds to the facility on U.S. Highway 20 in north Bend.

“We’re looking at all-time low interest rates,” Wynne said. “It’s not a bad time to do a bond if we need to.”

This isn’t a general obligation bond that would need voter approval, said County Administrator Tom Anderson. It’s a “full faith and credit bond,” which means the county will borrow the money under the understanding with investors that the county and the Sheriff’s Office generate enough revenue to cover the $500,000 annual payment without asking taxpayers for more money.

Between transfers from the general fund, the capital reserve fund and money already set aside, the county has $2.6 million toward the expansion, leaving $8.4 million left to come up with.

The 25-year bond for $8.4 million will carry a 3.34 percent interest rate, bringing the total debt service for the lifetime of the bond to approximately $12.5 million. The commission was also presented with options for a 20-year or a 30-year bond.

“We can borrow for 25 years with an eye toward paying it off sooner,” said Commissioner Tammy Baney during the work session.

Another option presented to the commission included selling county-owned property, but the group decided to hold onto property assets and hope the real estate market continues it’s upswing.

“We already sold most of the property we had that was easy to get rid of,” said Susan Ross, director of the county Property and Facilities Department. “The properties we still own all have issues and wouldn’t be simple to sell.”

There is no date set for construction to begin, said Commission Chairman Alan Unger.

“We lost several months of construction planning while we decided on how the project was going to look,” he said. “We’re actively pursuing development of the construction schedule now.”

Voters in 2010 rejected a $44 million bond measure, proposed to fund a doubling of the jail. Sheriff Larry Blanton turned to the commission in summer 2012 to help fund a smaller expansion. The commission at first rejected financing a share of the 144-bed project and opted instead to reconfigure the county juvenile detention facility into an adult jail and move the juvenile inmates into another renovated space. The commission scrapped that idea in January and returned to the $11 million expansion.