PORT TOWNSEND — Jefferson County is refinancing a 2011 bond that was used to fund improvements to JeffCom 911 and purchase land for the Port Hadlock sewer.
The Limited Tax General Obligation Bond was taken out by the county in March 2011. The refinance will lower the county’s interest rates, saving the county and JeffCom a combined $153,307 over 14 years, according to County Treasurer Stacie Prada.
This is the second bond the county has refinanced this year, according to Prada. In June, the county refinanced a 2007 bond that funded the JeffCom 911 communications and dispatch center, saving $130,832 on that loan payment.
“That one was taken out before the recession, but we wanted to refinance while rates were staying low,” Prada said. “This is a common thing for counties, especially when rates keep going down. Had rates gone up, this wouldn’t have been worth it.”
When the 2011 bond was taken out, the county’s interest rates were 4.2 percent to 4.5 percent for maturities of 2021 to 2030. Now those interest rates have been renegotiated down to 2.12 percent for the remaining 14 years.
Prada said the 2007 bond refinance helped save JeffCom 911 money because that bond was solely for them.
“In June, it didn’t make sense to change the terms for the 2011 bond,” Prada said. “With rates staying low, it definitely became worth it.”
According to Prada, just under 30 percent of the 2011 bond went to JeffCom 911, and it is responsible for paying it off.
“Since they’re paying other loans off, they’re just paying interest currently,” Prada said.
The other 70 percent of the bond was used to purchase land in Port Hadlock for the wastewater treatment plant and sewer. That section will need to be paid with county funds, and the refinance makes that much easier, according to Prada.
“We’re managing our finances as best we can given the financial climate right now,” Prada said. “With this, we’re reducing the interest rates on our debts, and that does free up some money or other items and county services.”
According to a news release from the county, the county’s current grade on outstanding bonds is AA, which is a high investment grade.
Prada, along with County Administrator Philip Morley, presented the refinance option to the county commissioners, who supported the idea, according to a news release.
“We are always looking for ways to save money,” said Morley in the release, “and we are pleased with the bond refinancing that achieves an interest cost savings that can be better used for providing services for our citizens.”
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Jefferson County Editor/Reporter Cydney McFarland can be reached at 360-385-2335, ext. 55052, or at cmcfarland@peninsuladailynews.com.
