Reworking jail debt could save Davis County $800K
Friday , April 13, 2012 - 5:07 PM
FARMINGTON — Refinancing $15.7 million in bond debt issued in 2005 to expand the Davis County Jail could save the county $800,000 over the life of the bonds.
The bond debt, originally $24.8 million, was taken out in 2005 to fund additions to the county jail in west Farmington, Davis County Clerk/Auditor Steve Rawlings said.
There is currently $19.8 million remaining on the original debt, with $15.7 million eligible for refinance to gain the county a better interest rate, Rawlings said.
Rawlings, along with County Commissioner Bret Millburn and a Zions Finance representative, recently took a one-day trip to San Francisco to meet with representatives from Moody’s and Standard and Poor’s to see what rating the county could receive if it chose to refinance some of the bond debt.
“I think it is very good news,” he said.
Rawlings said the county is trying to take advantage of its AAA bond rating where interest rates have gone the right direction.
“It’s like refinancing a home mortgage. It’s saving the taxpayers interest,” Millburn said.
Millburn estimated the county will save $800,000 over the 20-year life of the bonds.
The refinance in essence drops the interest rate the county is paying on the bonds from about 4.2 percent to 2.2 percent, he said.
“The savings would go back to the taxpayer through a lower tax rate," Rawlings said.
Right now, rates would allow the county to save 5.2 percent on the bond payment, Rawlings said.
“If you can save 3 percent or more on the bond payment, then it is worth looking at,” he said.
“We are always looking at those things.”
Rawlings said this is the second or third time since he took office in 1999 that the county has refinanced bond debt. Davis County currently has $68 per capita in bond debt.
By the end of April, officials expect the county’s refinanced bonds will be sold.