Bell County’s authorization of up to $46 million in new bonds may soon save more than $1.7 million in taxpayer money.
The Bell County Commissioners Court unanimously voted Monday to authorize the sale of $46 million in new limited tax refunding bonds Monday in order to pay off existing county debt. The new bonds would be at a lower interest rate over the next 12 years, with more than $1.7 million in gross savings for the county.
Financial advisor Dan Wegmiller, with Specialized Public Finance, told commissioners he wanted to have the ability to refinance up to $46 million if the market is good, but could also refinance less than that amount.
“What we had identified was two issues in 2012 and 2015 that had varied interest rates between 2 and 5 percent on outstanding bonds,” Wegmiller said. “We estimate today that new bonds could be issued at under 2 percent, which creates a savings. We want to take this cautiously and looking at what the market is doing.”
The amount on the new bonds will be paid off in 2032, the same timeframe of debt repayment as the current bonds put out by the county.
The debts being paid off by the new bonds would be from another consolidation of debt in 2012 and the construction of the new livestock and equestrian facility at the Bell County Expo Center in 2015.
Wegmiller said the earliest the county could issue the new bonds would be in January, but might need to wait before putting them on the market for the best value. Determining the best time to put the bonds on the market would be determined by county employees and officials in weekly meetings.
Wegmiller said possible legislation is being considered by Congress that would allow the issuance of tax-free bonds to refinance debt, which would make refinancing even better for the county.
“If we wait closer to the holidays, this rate should be stronger, but if we wait two years or four years, rates could go up quite a bit and we could lose that opportunity,” Wegmiller said in September. “The way I have always been brought up in this business is, it is bird in hand. We don’t gamble with planning on what we might make on the other end.”
Commissioner Bill Schumann said paying less in interest would allow the county to use its money on other projects instead.
“We are talking about borrowing, depending on if we do taxable or non-taxable bond issuances, at 1.2 percent,” Schumann said. “That is pretty inexpensive money. It can go to doing other projects, it can go to increasing the balance in the general fund. It comes down to saving taxpayer dollars and $1.7 million is a pretty worthwhile exercise.”