The Kearney County Board of Supervisors approved the refinancing of the Kearney County Health Services bond from 2009 at their meeting on Tuesday, January 17.
The refinance will lock in interest rates currently sitting at all-time lows. Cody Wickham of DA Davidson explained that the bonds have a 5-year call date but can take one advance refinance.
The bonds, which paid for HVAC, boiler systems and electronic upgrades were taken out in March of 2009 meaning they won’t be called until 2014.By refinancing, the board will pay out $1.14 million to pay off the bonds and that payment will sit until the call date and then be administered at the call date, March 31, 2014 at which time the savings were expected to be $55,000.
However, the interest rates dropped another 15 points over the previous weekend, which raised the expected savings to $70,000.
Present value savings is a metric used to measure the value of a potential refinance at a certain time by dividing anticipated savings by the number of bonds,
Any result over 3 percent is considered an advisable refinance. The hospital’s bonds are at 4.7078 percent currently, and that number was without the recent market drop.
In 2009, the projected 2012 interest rate was 2.25 percent, but rates currently sit at 1 percent, and calculating in the extra 15 points, that number may drop as low as 0.8 percent.
The county budget would need to be amended to reflect the pay-off because the county cannot have a set percentage of funds in the bond account at one time.
The county board approved the resolution to refinance, with a minimum savings of $60,000.
Hospital CEO Fred Meis commented on the hospital’s expansion, “Great, moving right along… they’re getting ready to close it in.” He added that, while there are some vacancies at long term care, Hinterlong is full.”
Joe Anderson reported to the board that the Nebraska Department of Environmental Quality (NDEP) is offering a tire cleanup grant which would come with no cost to the county.
The grant was expected to cover 200 tons of tire, with a maximum cost of $17,000. There would be no penalty if the county did not meet the maximums. The board unanimously approved Anderson to apply for the grant.
Additionally, the county approved participation in the Kearney County cleanup, partnering with the City of Minden for the project, expected to take place in May.
For more information, check out The Minden Courier