Refinancing saves county $880,000
WARREN — Refinancing some of Trumbull County’s debt will save nearly $900,000 in interest payments over the next 20 years, said Trumbull County Auditor Adrian Biviano.
The office this year refinanced more than $5 million in debt Trumbull County incurred in 2008 from bonds sold to pay for some water, sewer and other projects at an average rate of 2.9 percent — 1.9 percent less than the initial interest rate nine years ago.
The move saves $44,000 per year over the next 20 years, amounting to $880,000, Biviano said.
“This is real savings to our taxpayers,” Biviano said. “By working diligently to secure a lower interest rate and refund the series 2008 bonds, we will see savings in out annual debt service, and that will result in a reduction in the amount of ad valorem taxes needed to pay for debt service,” Biviano said.
An ad valorem tax is a tax contingent on the value of an item, like property.
To get the lower rates, the county’s financial advisor offered up the debt and received quotes from different financial institutions before settling on the best offer, said Debbie Santangelo, deputy auditor.
“Our financial advisor keeps track of all of our bonds and lets us know when the market is right to get an interest rate lower than the one we got when we originally took out the bond. He tracks all of our outstanding debt and checks to see what will qualify,” Santangelo said.
The county has a strong financial profile, which is a significant factor in the bond refunding process and the type of savings the county was able to obtain, Biviano said.
The Government Finance Officers Association recommends a net present savings of 3 to 5 percent when pursuing bond refinancing, but the county net present savings after the transactions was 13 percent, Biviano said.
The county has already saved $1.79 million in debt payments because of restructuring in 2011, 2015 and this year, according to the office.