News Column

Bond refinancing to save county $3M

June 9, 2014

Public Opinion, Chambersburg, Pa.



June 09--CHAMBERSBURG -- Franklin County commissioners voted to refinance the final piece of a 2004 bond issue, which is expected to save the county $793,194 in debt service payments.

Commissioners voted to refinance the last $9.6 million of the 2004 bonds at a public meeting on Thursday.

The bond sale was handled by the county's financial advisor, Public Financial Management Inc. of Harrisburg. The bonds were sold through an internet auction with five different banks bidding to purchase the county's bonds.

The banks competed by offering rates that are weighted for the various bond maturities. The lowest bidder, Janney Montgomery Scott, won with rates which average over the remaining 5 years 0.93 percent.

PFM advised the county to take advantage of low interest rates and refinance the debt in three steps. Since September, the county has refinanced $27.6 million, achieving a total savings of about $3.1 million:

"The $3 million we have saved by refunding debt obligations over the past 9 months results in a direct benefit to our taxpayers," Commissioner Chairman Dave Keller said in a statement.

The county has an AA bond rating as reaffirmed by Standard & Poor's. S&P cited the county's strong budgetary flexibility, budgetary performance, liquidity, management, and low debt.

Commissioners had borrowed $39 million in 2004 through a bond issue -- $30 million to build a new prison, $4 million to upgrade emergency communications and $5 million to preserve farmland.

The county budgeted a little more than $3 million for debt service for 2014. This includes principal and interest.

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(c)2014 the Public Opinion (Chambersburg, Pa.)

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Source: Public Opinion (Chambersburg, PA)


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