CUMBERLAND — Allegany County commissioners expect to save the county at least $1 million by refinancing part of the county’s debt by issuing bonds at a lower interest rate.
Commissioners approved a resolution to allow the refinancing to go forward at their Thursday business meeting at the county office building on Kelly Road.
The move will refinance various bond issues from 2001, 2004 and 2006, said County Finance Director Jason Bennett.
“This would occur on March 11,” said Bennett. “We think the interest rate will be about 2.1. percent,” Bennett said. The terms of the bonds will not be extended and bonds that paid for Mountain Ridge High School may actually be paid off earlier than initially planned. The exact interest rate won’t be known until the bonds go to market, he said.
County officials will meet with bond rating agencies next week, hoping to maintain or improve the county’s bond rating, Bennett said.
The two major agencies are Moody’s and Standard & Poor’s. The county currently has an A bond rating.
Two portions of debt will be refinanced, Bennett has said.
The first involves FEMA and other loans, the rest is a larger general obligation debt. The interest rates on the larger debts run between 3 and 5.75 percent.
A late-October 2012 work session included a presentation by Bennett and the county’s bond counsel, outlining some of the potential savings and the process for putting the bonds on the market.
While the financial issues are complex, the idea is simple: The county will issue new bonds at lower interest rates than the higher-rate bonds previously issued.
County Commission President Michael McKay was absent for Thursday’s meeting because of the birth of his eighth child, Lincoln Thomas McKay, to himself and wife Kimberly.
“With Mike’s help, we’re holding a steady population in Allegany County,” quipped Commissioner Creade Brodie Jr.
Brodie began the meeting asking all present to join him in a moment of silence to remember those serving in the armed forces overseas, and unable to be with their loved ones on Valentine’s Day.
Contact Matthew Bieniek at mbieniek@times-news.com.
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