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Franklin County reviews plan to refund $25 million in bonds to cut interest costs
Summary
PFM Financial Advisors told commissioners the county could refinance about $25.3 million of 2018 bond maturities, saving about $513,000 over the life of the refunded debt and roughly $60,000–$65,000 in annual payments; a parameters ordinance is expected at the Aug. 6 meeting and a competitive sale could follow in August.
John Fry of PFM Financial Advisors told the Franklin County Board of Commissioners that portions of the county's callable bonds could be refinanced later this year to lower interest costs.
Fry said the county is targeting 2018 bond maturities due 2027 through 2033, about $25.3 million of par value, and estimates approximately $513,000 in lifetime debt-service savings from that partial refunding. He described annual cash-flow savings in the neighborhood of $60,000 to $65,000.
Why it matters: the refunding would not create new borrowing or extend final maturities, Fry said; it is intended solely to lower the interest rate the county pays on existing debt and reduce future debt-service payments. Lower debt service can free up budget capacity and support the county's credit profile.
Fry summarized the constraints and timeline: the applicable bonds have call dates starting Nov. 1, 2026, which limits when portions can be refunded; staff and counsel would prepare parameters and legal documents through July so commissioners could consider a parameters bond ordinance at the Aug. 6 meeting. Fry said the county would then aim to conduct a competitive bond sale around Aug. 18 and settle about 30 days later, placing refunding proceeds in escrow to pay off the callable bonds.
Fry also walked commissioners through the mechanics, showing how selections of specific maturities (the 2027'033 pieces) produce the savings while leaving other maturities outstanding; he stressed the team would continue to monitor the market for additional opportunities.
No formal action was required at the meeting. Fry said staff would prepare the legal and financial documents and seek a credit rating as part of the parameters-ordinance process.
Details provided at the meeting included current estimates (not locked rates) of a move from roughly 4% to nearer 3% on targeted maturities, the plan to apply for a rating from Standard & Poor's, and the use of a competitive internet auction for the sale.
Next steps: the administration and the county's financing team will draft the parameters bond ordinance for the Aug. 6 meeting; any actual refunding would proceed only after the board's formal authorization and market execution.
