Scott County plans to refinance and repurpose recent bond issues to save money and put them to different uses.
The county’s Public Safety Authority voted Tuesday to refinance bonds used to pay for construction of the Scott County Justice Center. The Public Safety Authority is responsible for making the bond payments that financed the justice center, which opened in 2008.
“This is a savings we can’t pass up,” authority chairman Dale Barber said. “We have to take this opportunity.”
The refinancing will save the county $1.6 million, or about 8.6 percent, through the life of the bonds, which run through 2025, said Doug Green of Springsted, the county’s bond adviser.
The refinancing will be done through two bond sales, one of $10 million in 2012 general obligation bonds and a second $10 million sale of 2013 bonds, so the bonds will be bank qualified and likely return a better interest rate. The bond sales are scheduled for later this month and in mid-December.
County administrator Dee Bruemmer monitored the bonds for two years to find the best time to refinance, explaining she wanted the savings to be at least $1 million.
“The climate is now where we can save a million six,” she said.
Green told the authority that he doesn’t anticipate the county’s AA2 bond rating from Moody’s to change nor should the interest rates shift much before the bond sales but that the “fiscal cliff” discussions could have some impact.
“It is hard to predict the future, but over the next two weeks, it could take away from your savings,” he said.
Last week, the board of supervisors voted to repurpose $1.2 million in bonds that originally were part of the bond sale that paid for the Scott Emergency Communication Center radio system. If the remaining amount wasn’t repurposed, the county could have faced $2.2 million in federal tax penalties.
The bonds were repurposed to pay for future capital improvement projects, such as the recent reroofing of the jail, a $400,000 project.