On Wednesday, August 26, the County partially refunded (refinanced) its current County Courthouse debt service. This effort refinanced $5,485,000 of general obligation bonds that financed the construction of the County Courthouse and related improvements in 2010. These bonds were issued by the State of New York Municipal Bond Bank Agency Recovery Act Bonds, dated May 26, 2010, comprised of Federally Taxable Build America Bonds and Recovery Zone Bonds, bond programs developed during the 2009 recession that received direct reimbursement of over 1/3 of the interest due on the bonds from the Federal Treasury Department. At the time bonds were issued in 2010, the net interest rates on the bonds were considered very favorable; however, much like refinancing your own home mortgage, refinancing the County's outstanding bonds will reduce the interest paid over the life of the loan. The Board of Legislators approved the refunding on April 27, 2020, and the County along with its financial advisors, Municipal Solutions, Inc., have been monitoring bond market rates over the past months to find the time when market rates would be at their lowest level to maximize the savings to the County's taxpayers. Interest rates on municipal bonds are very favorable at this time, and the savings realized by refunding the outstanding bonds now, resulted in over $192,990 in increased budgetary savings over rates that were presented to the County Legislators in February 2020. In total, this refunding will save the County approximately $1,448,209 in interest payments during the remaining 14-year life of the reissued bonds ending in 2033. The bond industry “rule of thumb” indicates that a refunding bond resolution makes sense when a 3 percent present-value savings can be realized, and our refunding resulted in a 24.4 percent present-value savings, over eight times this savings level.
Roosevelt & Cross, a well-known bond house based in New York City, served as the underwriting firm that marketed the bonds. A detailed refunding savings analysis is attached to this release.
As part of the bond issuance process, the County’s finances were reviewed by the Standard & Poor’s Bond Rating Agency and the County’s A+/Stable rating was reaffirmed. The Rating agency noted the County’s positive operating performance over the past few years and the County’s strong reserve levels.
