County refinances bonds, lower interest rates save taxpayers $600,000

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ST. GEORGE – The Washington County Commission locked in new, lower interest rates Wednesday on a bond refinancing that will save residents money on their property taxes. By refinancing some bonds and paying others off early, the total savings to taxpayers next year will be $600,000.

A special Washington County Commission meeting was held Wednesday morning to lock in the rates and proceed with refinancing existing general obligation library bonds in a move that will save the county’s taxpayers $281,214.96, Washington County Clerk/Auditor Kim Hafen said. General obligation bonds must receive voter approval.

With that and some other bonds that we’ve paid off this year, we should, this year, have lowered the debt service portion of people’s property taxes by about 25 percent,” Washington County Commissioner Victor Iverson said.

The $5 million general obligation bond for library construction was approved by voters in 2007. The county has been paying on it since that time, but with interest rates at a 30-year low, now was a good time to refinance, Hafen said.

Exploring the bond refinancing has been a lengthy process, Iverson said.

“We’ve been in the process of this since, you know, back in the fall,” Hafen said. “And sometimes you wait too long and rates go up, and so you kind of lose some of your advantage; … in this case, rates have gone down since we first started the process. So actually, it was a benefit that it took awhile.”

Interest rates are the lowest they have been in almost 30 years, Hafen said, and the county is taking advantage of that.

“Essentially over the last several years we have refinanced all of our outstanding obligations, as rates have gone down,” Hafen said. “We’ve also paid off bonds early.”

In 2015, the county paid off some 2004 library bonds, saving about $50,000, Hafen said.

In 2014, the county paid off the Boulevard building early – where the Washington County Justice Court is located.

In 2013, the county paid off bonds for the Hurricane Senior Center early.

In 2017, a public safety bond will be paid off, so the tax rate in 2018 will be reduced again, Hafen said. This bond was refinanced in about 2007.

The total general obligation bond debt in 2015 was $2.5 million; in 2016 that number will go down to about $1.9 million, Hafen said, a savings of about $600,000 which will directly benefit taxpayers.

“That money doesn’t really benefit the county, so to speak, all it does is reduce the tax rate … it’s just a lower tax rate,” Hafen said.

General obligation bonds, which must be approved by voters, show up as a separate line on property tax notices as “general obligation debt.”

“The county enjoys a very good bond rating which helps with our interest rate,” Hafen said, “and that’s because the county is in good financial condition.”

The bond ratings agency Moody’s Investors Service gave the county an Aa2 rating, Hafen said.

“And that’s about the best rating a county our size can have,” Hafen said of the Aa2 rating. “We have that rating because we’re in good financial condition, we’re conservative with our expenditures and our revenues and we have sufficient fund balances that makes (sic) investors happy.”

Taxpayers can look for the savings on the next property tax statement, which comes in November at the end of the year, Hafen said. The general fund rate won’t change, but the county general obligation bond rate will go down.

“It’s not a ton of money per taxpayer,” Hafen said, “but it’s going in the right direction.”

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