Low interest rates to save county almost $1 million on bond sale
May 7, 2014 at 12:07 a.m.
Victoria County officials took on a new multimillion-dollar debt with interest rates they say will save big.
County commissioners approved taking on $6.5 million in debt through certificate of obligation bonds, which will fund major improvements and renovations to county-owned facilities.
The county's financial consultant, Bob Henderson, led the effort on the sale.
"There's the old adage that sometimes it's better lucky than smart," Henderson joked. "We were a little later getting into the marketplace than we expected to be, and that turned out to be a good thing."
Interest rates have fallen during the past three weeks.
Henderson initially estimated the county would get a 4.25 percent interest rate on the bonds but secured rates Monday of 3.15 percent, resulting in major savings over the debt's 20-year life span.
With interest on the $6.5 million bond sale, Victoria County taxpayers will foot the $8.9 million bill, of which $2.4 million will go to interest, rather than the initially estimated $9.9 million total.
"We are nearly a full million less than was anticipated," Henderson said.
The additional debt will not result in a change in the total tax rate property owners pay.
The funds, which are expected to be in the county's bank account by the end of May, will be used to renovate the Hartman warehouse and the old firehouse, demolish buildings at the airport and to improve roads and drainage.
County Judge Don Pozzi said the news was excellent.
"We certainly could not have asked for it to be any better," Pozzi said.
County Auditor Judy McAdams said the county has maintained its AA bond rating.