County approves conversion of $5 million of bonds to tax-exempt, bank-qualified status

Lancaster County commissioners on Dec. 2 approved a resolution to convert $5,000,000 of already-issued taxable revenue-refunding bonds to tax-exempt bank-qualified status, a move bond counsel described as largely administrative and designed to lower borrowing costs for the holder.

Colleen Duncan, a partner at Gilmore & Bell serving as county bond counsel, told the board the county issued $15 million of debt last year (of which $10 million was tax-exempt bank qualified and $5 million taxable) and is asking to convert the $5 million to tax-exempt bank-qualified. "We wait until the end of the year to do this to make sure that the county doesn't need it for any of its governmental purposes," Duncan said, explaining the annual $10 million bank-qualification cap that applies to governmental entities.

The board moved, seconded and passed the resolution by roll call, delegating authority to county staff (identified in the presentation as Tabitha) to execute the conversion and related documents. County staff and bond counsel said the conversion carries no taxpayer liability and is a structural benefit to the bondholder that may lower borrowing rates. The board's approval does not change county debt service obligations; the bond conversion relates to tax status and bank-qualification of outstanding bonds.