COUNTY SAVES TAXPAYERS $18 MILLION BY REFUNDING BONDS
Charlotte, NC Mecklenburg County Government has refunded nearly $254 million in general obligation public improvement bonds, saving taxpayers $18 million in interest over the next 10 years.
Finance Director Dena Diorio describes the refunding as the same as refinancing a home loan and taking the mortgage at a lower interest rate. The new bonds were refunded by Wells Fargo for approximately 10 years at a rate of 2.3%. The average annual saving is $1.5 million over the life of the deal for a total saving of $18 million.
The refunding was authorized by the Board of County Commissioners at its Feb. 3, 2009 meeting. The sale took place on Wednesday to take advantage of current conditions in the municipal bond market.
We have always looked for ways to save taxpayers money, says Diorio. We were able to take advantage of a narrow window of opportunity in the bond market to get a better rate on these bonds.
Also at its February 3 meeting, the Board approved the recommendation of County Manager Harry L. Jones Sr., to delay borrowing $253 million in bonds until next year's operating budget is developed. The delay will reduce a projected $90 million budget gap for next year (FY2010) by approximately $18.3 million. Borrowing the $253 million may be put off until FY2010 to defer incurring additional debt service costs until FY2011.