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Bond sale will save county almost $800,000 over next four years

Washington County had a good day in the bond market last week. On Dec. 16, the county sold almost $8 million of bonds to refinance the balance of the 2004 series of general obligation school bonds.
Mayor Dan Eldridge shared the results with commissioners during their meeting that night.
The county received 10 bids from potential investors, each offering an interest rate between .79 and 1 percent.
Though the sale won’t be complete until Jan. 24, 2014, Washington County was able to lock in a .79 percent true interest cost and a 1.13 percent all-inclusive cost.
One of the better-than-expected outcomes required a letter to the comptroller.
“We have to report if, prior to issuance, the actual result of any key metric is more than 15 percent higher or lower than the estimate approved in the original refunding plan,” Eldridge said.
The state comptroller’s office must approve any bond offering, and the plan was forwarded to the comptroller after receiving unanimous approval from the county commission during its November meeting.
The key metric Eldridge reported is the savings as a percent of the refinanced principal, which will be 16.52 percent higher than the original estimate. In addition, the estimated $695,000 in gross debt service savings will be closer to $800,000 over the next four years. The balance was refinanced without increasing the principal or the term of the original bonds.
The Budget Committee recommended refunding the bonds before the end of 2013 because of the exposure to interest rate uncertainty in the new year.
“Our timing was good on this, because I definitely think the rates will not go down,” Eldridge said. During recent discussions in New York regarding the county’s credit rating, Eldridge said Moody’s Investors Service analysts indicated the interest rate market is changing.
“They said it’s not a matter of if, but when and how much, and it’s not down,” he said.