Debt service lowered
Published 6:44 am Monday, April 29, 2013
POWELLSVILLE – With the passing of a laundry list of measures, the Bertie County Board of Commissioners were able to save county residents millions of dollars.
The board recently approved documentation to refund bonds for their four water districts which will equate to a savings of approximately $2.5 million over the course of two decades.
“Refunding is a new term for refinancing,” said Commission Chair J. Wallace Perry.
During a public hearing, Mitch Brigulio of Davenport & Company along Mary Nash Rusher and Kristin Kirby from Hunton & Williams presented documentation about the refinancing of the bonds.
“We’re still financing the same bonds all of the district bonds that we talked about before, those are the district USDA General Obligation bonds totaling $11.9 million; those are the bonds we are refinancing,” Brigulio said.
He added the county would see an annual savings of approximately $100,000 through 2035 or $2.5 million in total.
“Compared to what we talked about at the Board Retreat, we’re a little bit lower—we were right about $3 million at the Board retreat—but still $2.5 million in savings and one of the methods that we look at is the net present value savings as a percent of the bonds we’re refunding,” he said. “The GFOA will generally say three percent is a good target; you’re at 13.8 percent based on rates today.”
Brigulio added Davenport & Company will continue to monitor the savings as rates continue to fluctuate from day to day and keep the board up to date on it.
He explained the county is refinancing the USDA general obligation bonds issued by each of the water districts.
“The county is participating in that refinancing,” he said. “So in order to accomplish that the county will issue the limited obligation bonds and with those bonds they will purchase a refinancing bond from the Bertie County Water Districts. With the money that the Bertie County Water Districts get from selling those refinancing bonds to the county they will pay off USDA. So at the end of the day, USDA will be paid off and the districts will be left with lower debt service.”
The commissioners, acting as the Water District Board, unanimously approved the appropriate documentation to refinance those general obligation bonds.