County hears more about savings through refinancing

ORIGINALLY WRITTEN JERRY ENGLER
Two Wichita companies that handle bond issues visited the Marion County Commission Monday with information indicating the county could save around $25,000 with its plans to refinance its 2000 and 1997 bond issues.

David Arteberry of George K. Baum & Co. came with a completed plan that could push the county plan closer to the $30,000 savings mark by dropping interest paid from the 4.8 percent range to closer to the 1.6 range.

Charley Young of Public Finance Group came with elements of a plan worked out on a Sept. 30 visit to the county, not realizing there could be a competitive bid situation between companies.

Commissioner Leroy Wetta suggested that “in all fairness” Young be given a chance to put together a similar bid package by next Monday’s meeting.

County Treasurer Jeannine Bateman joined commissioners and County Clerk Carol Maggard for the bond discussion.

Arteberry sighted his company’s 75 years of experience in the markets. He said the company’s goal is to establish long-term relationships with the many municipalities, school districts and counties it serves.

The commissioners explained that they valued their long-term relationship with Jonathan Small, Topeka bond attorney counselor, and Arteberry said his company would use Small for counsel.

Arteberry said the county’s outstanding balance for the year 2000 issue bonds for road improvements is at $660,000 at an average rate of 4.67 percent with maturity of the final group in 2006.

He said the balance of the 1997 bond issue for a courthouse elevator is $100,000 with an average rate of 4.85 percent and final maturity in 2007.

Arteberry said with a significant drop in interest rate to a predicted 1.615 percent, the county could have a net savings on the 2000 issue of $23,772. He said if the county chose to refinance the 1997 issue also, the total savings would climb an additional $6,000 to $29,685.

Both savings figures are net to the county after all bond reissuance costs, he said.

Arteberry said his company’s fee would be 0.70 percent or $4,760.

Commissioner Bob Hein seemed to indicate the general mood of commissioners upon hearing the figures with his comment that “with that low interest rate it sounds pretty good.”

Arteberry cautioned that with the short term of the bond reissue investors would be “unlikely to want to allow an early payoff” as the county has done before. He suggested that if surplus dollars toward bond repayment become available in the future that the county set them aside in an interest bearing account rather than expecting early pay-out.

Wetta said such a savings might necessitate setting up an escrow account which Arteberry said could cost another $1,500 to $2,000 to set up.

Commission Chairman Howard Collett asked if the county’s exceeding its debt limit at the time of the bond issuance for the transfer station could affect investments in its bonds now.

Arteberry said there would be no such effect because counties routinely exceed their debt limits.

Collett told Young that the situation with more than one bond company represented really wasn’t for bidding purposes, but for the commissioners to be able to consider more than one proposal.

Young did have a net savings figure to the county on the 2000 issue of $24,564.41 as of Sept. 30, but said he would have new comparable figures before next week’s Monday meeting.

Young said he has five years of experience, and has been in business since June for himself, but he works with the firm Piper Jaffray of Kansas City for additional financial reliability assurance.

Young had a tentative fee of $13,500 which included legal counsel he now works with, but he said the savings was net after the fee, and should be a similar figure from any reputable company.

David Brazil, sanitarian, planning and zoning, and transfer station director, went over budgets for his three departments through September.

Brazil said the planning and zoning budget spending was 10 percent under budget the end of September, and Wetta noted that could result in $4,000 to $5,000 savings by the end of the year if it continued.

Brazil said the transfer station budget is falling into line much as he planned for in its first year of operation with 71 percent of budgeted spending for the year complete Sept. 30.

He said varying figures should even out by the end of the year with tipping fees under what was expected, but with hauling fees higher than anticipated.

Wetta said, “You’ve done a really good job with budgeting balance in the first year without any previous experience. I am really pleased the estimate is coming in as well as it is.”

Brazil said plans are continuing for a new handicapped accessible restroom at the transfer station.

He said trash haulers have been pleased with the new scales at the transfer station.

The commissioners directed Brazil to think in terms of trade-in value on the station’s skid loader when the time comes to replace it at the end of the year. The purchase was already budgeted in capital outlay.

Brazil said he may go to a higher horsepower machine that can push wet trash more easily.

The commissioners “reluctantly accepted” the resignation of Susan Cooper from the county’s economic development council, and welcomed her as the new reporter for the Marion County Record. Cooper also resigned her position as economic development director for the City of Marion.

The commissioners recessed from the meeting to view Ulysses Road northwest of Antelope at the request of Carl Stovall. At Wetta’s suggestion, they also planned to view new aggregate overlays to the surfaces of Lost Spring and Tampa Roads.

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