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Financial advisor reviews past refinancings, explains 2020B conversion and updated sales tax projections
Summary
Raymond James financial advisor Greg Varenberg briefed the Miami County commission on municipal refunding mechanics, savings achieved in prior refinancings and the action before the board to convert interest on PBC Series 2020B bonds from 3.5% (taxable) to 2.6% (tax‑exempt).
Greg Varenberg, municipal financial advisor with Raymond James, reviewed the county's prior bond refundings and explained the technical steps behind the resolution the board adopted to convert interest on the Public Building Commission Series 2020B refunding bonds.
Varenberg told the commissioners the county captured $2,594,514 in savings when it completed the 2020 A/B refinancing and shortened the repayment schedule on that portion of the debt from 2045 to 2039. He also reported a savings of $1,330,065 associated with a 2022 refinancing on another portion of the county's debt and said that portion's repayment schedule was shortened to 2029. He explained two refunding techniques: a current refunding (paying off the old bonds immediately with the proceeds of a new issue) and an advanced refunding in which proceeds are placed in an escrow and older bonds are paid at their first available call date. Under changes made in the Tax Cuts and Jobs Act, certain advanced refundings were treated as taxable until conversion at a call date; the resolution approved April 2 implements the planned conversion for the 2020B series from a taxable rate of 3.5% to a tax‑exempt rate of 2.6%.
Varenberg also reviewed updated sales tax collections that feed the law enforcement center debt service. He said stronger‑than‑expected sales tax collections improved projections and could move the date when the county can defease the remaining bonds earlier than previously estimated — potentially to about 2031 or 2032 depending on future growth rates — though he cautioned the date depends on future sales tax performance.
When asked what market rates for a 20‑year issue look like today, Varenberg said counties at Miami County's rating were “probably borrowing somewhere around a 4% rate.” He added that while rates are higher than the record lows seen in 2020–2022, they remain lower than much of the historical period since 1990.
The board thanked Varenberg for the overview and subsequently approved the resolution that allows the interest on the 2020B refunding bonds to convert to the planned tax‑exempt rate.
