Posted on November 25, 2019
Author Anita Goodan, WKVI
Starke County Council members are reviewing four options in an effort to save money on the 2013 Starke County Justice Center bond 2013 repayment.
The county currently pays $1,070,000 annually on the $14 million bonds that financed the Starke County Justice Center construction project.
Todd Samuelson from Baker Tilly explained that the council could approve an early redemption feature to refinance with a lower interest rate and pay off the bonds in 2032, or 18 months early, with a savings of nearly $9,000.
“There is a technique that can be done where a new set of bonds would be issued in advance of that call date,” stated Samuelson. “The proceeds of that bond issue would be invested or put into an escrow account and then the holders of those bonds would be paid off at that time.”
The new bonds would be sold at a taxable rate rather than a non-taxable rate.
Other options include issuing new bonds to refinance or pay off the old bond and reduce the annual payment to save $20,000 annually, lift the debt service reserve with cash and fund with an insurance policy for $38,000 with a savings of $110,000 with the current interest levels, and refinance bonds but generate $1.2 million in cash to be used for facility updates at the jail.
With any change, it’s recommended that the cash reserve be placed with a surety insurance policy.
The council agreed to move forward to move the legal process forward to get the process started and make a formal decision in a future meeting as interest rates may be favorable in a few months.
Showing posts with label jail bond refinancing. Show all posts
Showing posts with label jail bond refinancing. Show all posts
Monday, November 25, 2019
Tuesday, September 17, 2019
Starke County Officials Review Paperwork to Potentially Refinance Jail Bonds
Posted on September 17, 2019
Author Anita Goodan, WKVI
Representatives from financial firm Baker Tilly presented bond refinancing information to the Starke County Council and Commissioners Monday night as the county has an opportunity to possibly save money on the 2013 jail bond repayment.
The county currently pays $1,070,000 annually on the $14 million bonds that financed the Starke County Justice Center construction project.
There were several cost-saving scenarios given to the county. The interest rates are lower which would free up annual cash flow. If the county decided to refund the bonds and keep the payments where they are, about $1.5 million would be generated in cash.
The current interest rate is about 3 percent and the rate would drop to 1.6 percent if the decision is made to proceed.
The bonds go through the year 2034.
The council members and commissioners took the information under advisement to take a closer look at what was presented. Council President Dave Pearman asked the Baker Tilly representatives to come up with a shorter repayment term just for another choice for the county leaders to consider to ensure they make the right, informed choice.
Author Anita Goodan, WKVI
Representatives from financial firm Baker Tilly presented bond refinancing information to the Starke County Council and Commissioners Monday night as the county has an opportunity to possibly save money on the 2013 jail bond repayment.
The county currently pays $1,070,000 annually on the $14 million bonds that financed the Starke County Justice Center construction project.
There were several cost-saving scenarios given to the county. The interest rates are lower which would free up annual cash flow. If the county decided to refund the bonds and keep the payments where they are, about $1.5 million would be generated in cash.
The current interest rate is about 3 percent and the rate would drop to 1.6 percent if the decision is made to proceed.
The bonds go through the year 2034.
The council members and commissioners took the information under advisement to take a closer look at what was presented. Council President Dave Pearman asked the Baker Tilly representatives to come up with a shorter repayment term just for another choice for the county leaders to consider to ensure they make the right, informed choice.
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