County to save interest with refinance plan
Arrangement will net $642,000 over six years
HOLLIDAYSBURG –Blair County will move ahead with plans to pay off 2011 bond holders in a financial arrangement that will save the county $642,000 over six years.
Bond counselor Sean Garin of Dinsmore and Shohl LLP, a public finance attorney in Pittsburgh, advised commissioners Tuesday to proceed with the refinancing plan which he described as “a no-brainer.”
In 2011, commissioners arranged a bond issue to pay for about $8 million in upgrades to the 911 Center and for about $4 million in additional expenses.
At a previous commissioners meeting, Finance Director Jennifer Sleppy indicated that the county was paying an average interest rate of 4.07% on the 2011 bonds.
Instead of trying to refinance that debt by setting up a new bond issue at a lower interest rate, Commissioners Chairman Bruce Erb showed interest in approaching banks.
If a bank were interested in the refinancing proposal, then the county could avoid costs associated with a replacement bond issue, Erb said. On Tuesday, he said the county incurred about $145,000 in fees when it arranged its 2017 bond issue. The cost to the county for the proposed refinancing, through a bank instead of a replacement bond issue, will be about $27,000, Erb said.
At Tuesday’s commissioners meeting, Sleepy reported that First National Bank presented the county with the best interest rate, at 1.63 percent, in response to the proposed refinancing. The project creates a reduced debt for the county, in the form of a general obligation note, at $7.92 million.
Garin, who works with other governmental entities, said First National has been aggressive in bidding for this type of business. He encouraged commissioners to move forward. His company will assist the county in meeting its obligations to the 2011 bond holders.