Refinancing could save $800K
WILLMAR -- What is a tough market to many could bring potential savings to Kandiyohi County.
The county is considering refinancing the 1998 bond that helped fund the Health and Human Services building on the north edge of Willmar.
If the current interest rates continue, the county could save $800,000 over seven years, according to Carolyn Drude, the county's financial consultant from Ehlers. She warned, however, that the market could change between and now and the potential July 21 bid date.
In March, Drude predicted the county's savings would be $450,000. The increase to $800,000 in possible savings makes re-financing even more attractive and would be worth the cost of the transaction, she said.
Kandiyohi County Commissioner Richard Larson said the refinancing is "worthwhile pursing."
"We have to take a chance," agreed County Administrator Larry Kleindl.
The county used certificates of participation, issued by the Kandiyohi Building Authority, to finance construction of the multi-use county building a decade ago. Drude is proposing they be replaced with general obligation capital improvement plan bonds. The savings would come in the form of reduced debt service.
Also, the $1,800 annual trustee fee would be eliminated and debt service payments are outside the levy limits the state has imposed on local governments.
If the transaction is completed, Drude said it would "basically amount to the county purchasing the Health and Human Services building from the Kandiyohi Building Authority."
At its meeting last week, the Kandiyohi CountyBoard of Commissioners agreed to hold a public hearing June 16 on whether or not to call for the bond sale. If the market still looks attractive at that time, the sale will go forward and bids will be opened on July 21.