The Wright County Board of Commissioners Tuesday approved the sale of $40,960,000 in Series 2017A Jail Refunding Bonds.
The resolution passed by the board authorized Ehlers and Associates to assist the county throughout the sale.
The refunding is expected to reduce the county’s future interest by approximately $6.74 million over the next 12-plus years.
Interest rates on the current Series 2007A bonds are between 4.00% and 4.75%. The estimated refunding interest rates are 0.80% to 2.90%.
Total annual principal and interest payments will be between $3.51 million and $3.9 million, with the final payment due Dec. 1, 2029. The average annual interest savings will be approximately $562,000.
Without the refunding, the county would have paid $56,374,075 over the life of the bonds. That number with refunding is reduced to $49,631,901.
The transaction is considered an advance refunding because the new bonds will be issued more than 90 days prior to the Dec. 1, 2017 call date of the 2007A Bonds. The county does not expect to have higher savings by waiting closer to the call date.
The official statement of sale will be distributed the week of April 3. Closing date is April 24. The board will award the sale of the bonds April 25.
The entire cost to issue the bond is approximately $330,000. Bruce Kimmel, senior municipal advisor/ director with Ehlers, said his firm is reducing its fee to the county for the transaction.
“Our fee will not exceed $50,000, including all staff time and out-of-pocket costs,” he said. It is a pretty significant reduction from our standard fee for service. We are very motivated to regain this relationship with the county.
Before a vote on the refunding resolution, Kimmel presented another scenario where the board could decide to combine the refinancing bonds with future bonding of about $40,000 million for the new courthouse facility.
But the board decided it wasn’t prudent to move ahead yet.
“Doing them together would be a little premature for us because we’re not settled on a number with the courts yet,” said Commissioner Michael Potter. “I don’t want to say $35 million, $38 million or $40 million until we have something firmed up. The jail refunding, that’s the here and now, that’s the bird in the hand. I’m anxious to get that done.”
Security Grant
The board approved two grant applications that could helf finance security in the new courthouse building. The first is a $576,039 grant with a 100% match by the county to cover all the new enhanced security features.
The second grant is $37,580 with a local match of the same amount cover the purchase of a security screening package scanner, a walk-through magnetometer and approximately 25 security cameras.
