The Grundy County Commission, at its meeting next Tuesday, will consider a proposal that saves the county interest money on the bonds that were used to finance construction of the law enforcement center.
It’s anticipated the commissioners will approve a refinancing resolution that saves the county over 822 thousand dollars ($822,277) in future interest expense.
The proposal comes from the municipal bond underwriter: L-J Hart and Company of St. Louis. Grundy County has been assigned a credit rating of “A-plus” from the Standard and Poor’s Corporation. In addition to the three commissioners, input was provided to the credit rating company by Trenton community developer Ralph Boots and NCMC Development Director Teresa Cross. The top official with LJ Hart, (Larry J. Hart) noted the new credit rating helps Grundy County earn additional interest and enhances the marketability of the 2016 lease certificates.
Presiding Commission Rick Hull reports the average interest rate thanks to refinancing will be down to two point one five (2.15%) percent. By comparison, the original certificates from 2007 had a rate of four point three seven (4.37%).
First District Commissioner Gene Wyant stated the savings plan to be implemented “levels out” the annual payments without extending the final maturity date beyond December 1st of 2030.
There is an optional redemption provision that in December 2020, Grundy County can potentially pre-pay on the principal whenever it’s believed the county has sufficient reserves to do so. That could occur when the investment income on reserve funds is less than the interest being paid on 2016 certificates.
According to the re-financing proposal, Grundy County expects to have interest savings of nearly 40 thousand dollars ($39,685) next year (2017); and similar, if not greater, savings would occur in each of the following years.
Second District Commissioner Joe Brinser said having those savings available annually makes it possible for the county to consider using those funds on elsewhere including more improvements.
It is a projection by the LJ Hart Company that interest rates on the bonds can be expected to range from as low as point eight (0.80%) percent up to two point seven percent (2.7%) – figuring an average of two-point-one-five (2.15) over the next 13 years (2017 through 2030).
Lease refunding certificates are to be made available locally in five thousand dollar denominations. The local marketing effort is expected to include Edward Jones and Company as well as Raymond James and Associates.
The remaining principal on the 2007 jail lease bonds is three million, eight hundred five thousand dollars.
The closing date on the refinancing plan is June 30th.