Navajo County is hoping to save around $ 250,000 annually to take advantage of epic low interest rates by refinancing around $ 11 million in debt.
The Board of Supervisors approved the plan to save interest on the money borrowed years ago to modernize the prison, public works, and other projects.
The county should replace the 3.15% rate with a rate of perhaps 1.27% for the existing debate. The change would save the county $ 250,000 in the coming fiscal year alone and at least $ 1 million over the next 10 years, said Mark Reader, whose firm acts as the county ‘s bond insurer.
“We are seeing historically low interest rates. We’re kind of happy now. We believe prices will stay low. We’ve seen up and down movements depending on the size of the stimulus package (federal COVID-19) – so we’ll keep an eye on that. “
No one spoke about the proposal at the planned public hearing. Regulators, who participated through a zoom link, unanimously voted to approve the plan.
The Stifel, Nicholas and Company reader commented, “One of the few positive things about COVID – the rates being propelled to historic lows. We believe there is an exciting opportunity for the county to save a significant amount of money. “
He noted that the county is likely to qualify for the lowest possible interest rate based on its credit rating. The district has a relatively low debt burden compared to the sales taxes it levies. Despite the impact of the pandemic on the economy, the county continues to have a healthy reserve fund. Both of these factors will bring the county a low interest rate, he said. It will take about a month to prepare for the lower interest rate sale of the new bond and to use the money to pay off the old debt. The county’s funding arrangements do not include an early payout penalty in order to receive the lower rate.
At the end of the presentation, Chairman Daryl Seymore said, “It’s interesting how a bond seller lets you know that you have outstanding bonds and that they are doing an excellent job.”
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