Bonds from 2002 and 2003 carried a higher interest rate
FREEHOLD, NJ – The economy may still be lagging, but the Monmouth County Board of Chosen Freeholders plans to take advantage of the lower interest rates by refinancing bonds from 2002 and 2003. The savings on interest is expected to be about $1.3 million.
“As stewards of the taxpayers’ money, we always look for ways in which we can achieve savings,” said Freeholder Robert D. Clifton, who oversees the county’s Finance Department. “Our finance director has advised the Board that if we refinance these older bonds, we can yield a savings of $1,369,000 over the next three years and still retire the debt on time as originally planned.”
To achieve this savings, the freeholders have scheduled a public hearing and vote on a new bond ordinance for the Oct. 14 meeting. The new bond ordinance, in the amount of $37 million, will be sufficient to pay off the existing bondholders and yield the $1.3 million in savings.
“This is no different than refinancing a mortgage,” Finance Director Craig R. Marshall said. “Interest rates are low right now, which make it possible to sell the debt at a lower interest rate than what we sold it for seven or eight years ago. The county will still retire the debt as scheduled.”
County bond ordinances typically take 15 years to pay off, Marshall said. This new bond ordinance will be paid off in 2018, the same date as the original 2003 bond ordinance.
“Next year is going to be another tough budget year,” Clifton said. “Taking this action now will improve the county’s financial position by more than $1 million. By refinancing the county’s debt we will provide some much-needed relief for the 2011 budget as well as for 2012 and 2013.”