County Council Saves $1.24M in Bonds Refinance Ordinance

— by Margie Doyle —

At its August 30 meeting, the San Juan County Council voted to adopt a Bond Refunding Ordinance that will save the county over one million dollars over the next 20 years.

The ordinance was presented to the council by County Treasurer Rhonda Pederson; and by Susan Musselman, Public Financial Management Advisors, LLC; and Scott McJanet of K&L Gates.

The two bonds that are subject to refinancing are:

• the 2009 bond to purchase property at the Orcas Landing: In 2009, the County committed to a 10-year, $2,270,000 bond with an interest rate of 5.12331percent to purchase the Orcas Dock and the Russell Building at the Orcas Landing. The bond debt currently outstanding is $1,670,000. It’s estimated that with a lower interest rate and an extension of the life of the bond until 2028, there is savings of $232,294.
• the 2006 bonds, originally set at $15,415, 000 and presently at $5,165,000 for acquisition of land for conservation purposes and improvements to a building for county use. The refinancing will extend the life of the loan for 20 years; and savings are projected to be $1,007,987.

County Council member Rick Hughes said at an earlier hearing of the ordinance on August 9, “It’s important that the public understand that we work to save money in non-exciting ways. The interest rates should be half of where we’re at now [assuming 2.58 percent as opposed to 4 -.5 percent now].” Hughes said recently that these two bonds amount to about half of the county’s debt portfolio, and that County debt is now reduced to $12.8M, as compared to $15-16M in 2012.

Hughes credited Council Chair Jamie Stephens, County Auditor Milene Henley, County Manager Mike Thomas, and County Treasurer Rhonda Peterson, for bringing the proposal forward.

Hughes also recollected that the County had retired about $800,000 in Solid Waste debt and reduced the tax rate for solid waste from 16% to 14.5% in Feb. and Dec. 2015, respectively.

Now, as the County heads into completion of its budget by December, Hughes says, “We’re looking to hold the line on our budget.” Hughes said the departments were asked to prepare a status quo budget even though it appears the revenue will be up over last year. “It is important to stick to the debt and reserve policies to ensure the County maintains a strong financial position, said Hughes.” Adherence to careful fiscal management was one of the reasons the County received a favorable bond rating (Aa3) from Moody’s.

Hughes added, “Paying less in debt obligations has an immediate and direct impact on the 2017 budget. It frees-up funds to support the growing cost of services and programming without having to increase taxes.”