Bond savings to county greater than expected
WILLMAR –– The refinancing of $7.3 million in general obligation bonds that was approved Tuesday by the Kandiyohi County Commissioners will save the county nearly $670,000 over the remaining life of the bond.
The savings are about $132,000 more than expected.
“It’s a good day. It’s a very good day,” said Shelly Eldridge, a financial advisor from Ehlers, the county’s financial consultant.
The initial bonds, which were issued in 2004 and 2007 for the law enforcement center, will be paid off in 2021.
With the projections that the county could save an average of about $90,000 a year in principal and interest payments, the County Commissioners agreed earlier this spring to seek bids to refinance the bonds.With a solid “AA” rating and stable outlook from Standard & Poor’s Rating Services, which also praised the county’s “very strong” budgetary flexibility and liquidity regarding available reserve funds to cover debt service and expenditures, the county got the attention of five bidders.Piper Jaffray & Co. of Minneapolis had the low bid of 1.37 percent, resulting in average annual savings of about $112,000 –– nearly $22,000 more a year than expected.The decision to proceed with refinancing the bonds was based on the projects, said County Administrator Larry Kleindl.“If it’s better, then you smile,” said Kleindl. “I’m happy with the results.”Besides the county’s strong budgetary performance, Eldridge said Standard & Poor’s also took note of the county’s status as a regional center, the economic boost the county gets from having a strong agricultural and tourism sector and the fact that the county’s unemployment rate is lower than the national figures.The county also has a history of issuing bonds with a short life-span of 10-15 years.Eldridge said that plays into the county’s “very strong” debt profile that resulted in the premium bid by Piper Jaffray.In anticipation of moving to paperless meetings by using iPads, the Commissioners approved a policy for proper use of electronic devices. The policy will not only affect the Commissioners after they receive their iPads in the next week, but will apply to all elected officials, employees and consultants who are issued a county-owned electronic device.The Commissioners will not only be trained on how to use the technology but will also be briefed on how to avoid open meeting law violations related to using electronic equipment.Kleindl said the Commissioners will get a chance to learn how to use the new equipment “before we take your paper away.”Chairman Jim Butterfield said using iPads instead of paper agendas and packets will be “a little cumbersome at first” but will save the county money.In other action:- The final members of the county’s Aquatic Invasive Species committee were approved and meetings will be scheduled in the near future to determine how to implement the county education and prevention plan, which will be funded with new state funds. Kandiyohi County is expected to receive $385,000 over the next two years to address AIS.- The Commissioners approved two easements with the U.S. Fish and Wildlife Service for parcels of land in Norway Lake Township and Lake Andrew Township.- The Commissioners were informed that surplus county office supplies and equipment sold at auction last week netted a profit of $16,802.