This debt is from a bond series with a call date in 2022. The current interest rate is around 4.81%. Under changes to our tax law, it is impossible to refund (refinance) them with tax exempt bonds until the call date. But they can be refunded with taxable bonds. If it is done at an interest rate under three per cent, the County would save $3.2 million. Alternatively, the County could wait until the call date and save more or less, depending on the interest rate.
By approving the refinancing last night, County Council has given financial adviser Scott Shearer the authority to pull the trigger if he can save the county $3.2 million.
There was some confusion among Council members about a $75 million issuance to refinance $61 million in debt. Shearer explained the refinancing would have to include the interest, which would increase the debt to about $67 million. He has no expectation of issuing $75 million in bonds.
He added the only purpose of this new bond is to refinance existing debt. There will be no new money.
In other business, County Council introduced an ordinance to condemn 150 South Union Street in Easton. This is adjacent to the county campus and is for a handicap-accessible parking lot to service the courthouse and jail. Interestingly, this property was just purchased in
As the meeting ended, Council President Ron Heckman announced that Vargo-Heffner was absent because her father passed away the previous day.He asked everyone to keep her and her family in their thoughts.